Gauging The Biological Terrorism Risk
Thursday, January 24th, 2002 Catastrophe Life & HealthWhat impact will the threat of terrorism have upon the business practices, and the solvency, of United States life insurance companies? Life insurance executives must grapple with decisions on administrative, marketing, underwriting, pricing and reinsurance practices, as well as surplus levels. Such decisions will vary with the level of risk being considered, such as the single incident World Trade Center disaster, compared to the threat of biological warfare being imposed on a larger, more national, basis. Administrative concerns include the location of the home office and major service centers. Are they in major cities, or high-rise buildings, that have a high-profile risk with terrorism? Are back-up systems adequate? Marketing concerns include the concentration of a company's business, including its geographic spread, mix of corporate clients, and any focus on upper-income clients.
