S&P Reports Insurers to Cut Cover for Losses Due to Terror
Thursday, January 10th, 2002 CatastropheSeveral commercial insurers will cut coverage for losses caused by acts of terror, allowing 2001 policies to go unrenewed for 2002, Standard & Poor‘s reported. It added that the withdrawal from the market will spread beyond property and aviation insurance to include other risks, such as employees‘ workers‘ compensation coverage. "Though they haven‘t yet, Congress may pass legislation that would help to cap losses to the industry caused by terrorism," said Don Watson, a managing director with S&P‘s Insurance Ratings group. "But many insurers will not want to provide significant coverage for terror losses regardless of government action. By their nature, terror losses are difficult to price, and the potential concentration within an insurer‘s portfolio are such that it would be imprudent for insurers to write coverage without effective reinsurance.
