Domestic Insurers' September 11 Losses Reach $9.3 Billion

PALM BEACH GARDENS, Fla., September 4, 2003 - The nation's property and casualty insurers' net claims1 arising from the September 11 terrorist attacks reached $9.3 billion by December 31, 2002, compared to $8.5 billion reported through December 31, 2001, according to Weiss Ratings, Inc., the nation's leading independent provider of ratings and analyses of financial services companies, mutual funds, and stocks.

Weiss reviewed more than 2,150 financial statements filed with the National Association of Insurance Commissioners (NAIC) and found that the insurers recording the largest dollar amount of net claims from the September 11 terrorist attacks were:

Company Headquarters Weiss
Safety
Rating
9-11
Net Claims
($000)
Loss as %
of Capital
& Surplus

General Reinsurance Corp. Stamford, Conn. B- 1,418,000 34.6
Allianz Insurance Company Burbank, Calif. C 625,000 23.6
St Paul Fire & Marine Insurance Co. St. Paul, Minn. B 554,760 11.3
National Indemnity Company Omaha, Neb. B+ 499,840 3.2
American Re-insurance Co. Princeton, N. J. C- 451,700 20.3
Federal Insurance Company Indianapolis, Ind. B+ 426,180 9.6
Swiss Reinsurance America Corp. Armonk, N. Y. C 346,000 14.5
Factory Mutual Ins Co. Johnston, R. I. C 270,373 14.0
Hartford Fire Insurance Co. Hartford, Conn. B+ 268,505 4.2
Hartford Accident & Indemnity Co. Hartford, Conn. C+ 211,504 14.0
Weiss Safety Rating: A=Excellent; B=Good; C=Fair; D=Weak; E=Very Weak

General Reinsurance Corp. and National Indemnity Co., both owned by Berkshire-Hathaway, had a combined loss from September 11 of nearly $2 billion — comprising 20.6 percent of the total losses.

Companies posting the largest net claims from the attacks, measured in terms of their impact on capital and surplus, were:

Company Headquarters Weiss
Safety
Rating
9-11
Net Claims
($000)
Loss as %
of Capital
& Surplus

Sea Insurance Co. of America Charlotte, N. C. D 36,300 40.5
Connecticut Indemnity Co. Farmington, Conn. D 7,260 36.4
American & Foreign Insurance Co. Charlotte, N. C. D 18,150 35.5
Empire Insurance Company Brooklyn, N. Y. F 1,855 35.2
General Reinsurance Corp. Stamford, Conn. B- 1,418,000 34.6
Weiss Safety Rating: A=Excellent; B=Good; C=Fair; D=Weak; E=Very Weak

"Although final claims may not be known for years, domestic insurers were effective at spreading the risk for such a catastrophic event," commented Melissa Gannon, vice president of Weiss Ratings, Inc.

Terrorism Backstop Legislation Enacted

In 2002, Congress enacted the Terrorism Risk Insurance Act (TRIA). TRIA calls for a temporary federal program where the federal government shares the risk of loss from certain acts of terrorism with the insurance industry. Insurers are required to pay a deductible, which increases as the program ages, before federal assistance becomes available. Once the deductible is met, there is a 90/10 coinsurance arrangement between insurers and the government. Insurers assume 10 percent of the losses, while the government assumes the remaining 90 percent, up to the TRIA liability cap of $100 billion.

Federal coverage is provided only if certain conditions are met, including a specific definition of a terrorist act and a minimum loss threshold. Ultimately, policyholders will bear the burden for the program, which allows insurance companies to levy surcharges on their policies to help recoup the amounts paid out as deductibles and coinsurance for losses.

Weiss issues safety ratings on more than 15,000 financial institutions, including insurance companies, banks, and brokerage firms. Weiss also rates the risk-adjusted performance of more than 12,000 mutual funds and more than 8,000 stocks. Weiss Ratings is the only major rating agency that receives no compensation from the companies it rates. Revenues are derived strictly from sales of its products to consumers, businesses, and libraries.

Consumers needing more information on the financial safety of a specific company can purchase a rating and summary analysis for as little as $7.95 through www.WeissRatings.com, or starting at $15 by calling 800-289-9222.


1 Net claims equal gross claims plus reinsurance assumed less reinsurance ceded. The September 11 losses of $9.3 billion include claims from the following lines of business: workers compensation, auto physical damage, commercial multi-peril, other liability, and aircraft.


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