Terrorism risk top priority after bin Laden’s death, U.S. insurance industry notes

Through persistent vigilance, terrorism risk in the countries of the Western alliance will continue to be effectively controlled, according to the catastrophe modeler RMS, commenting after the death of Osama bin Laden in a U.S. helicopter raid on a compound in Pakistan. One of the FBI’s 10 most-wanted fugitives, bin Laden is founder of al Qaeda, an organization that took responsibility for hijacking U.S. commercial planes and crashing them into various U.S. landmarks, including the World Trade Centre in New York and the Pentagon in Washington, D.C. on Sept. 11, 2001. The U.S. State Department has warned about the “enhanced potential for anti-American violence” following the announcement of the Al Qaeda leader’s death, the Insurance Information Institute (III) has said. “The fact that acts of terrorism are intentional, and that the frequency and severity of attacks cannot be reliably assessed, makes terrorism risk extremely problematic from the standpoint of insurers,” said Dr. Robert Hartwig, an economist and president of the III. III released a white paper last month, Terrorism Risk: A Reemergent Threat: Impacts for Property/Casualty Insurers. At the time, for property/casualty insurers and reinsurers, the terrorist attack of 9-11 was the largest loss in global insurance history – producing insured losses of about $32.5 billion (or $40.02 billion in 2010 dollars), III reports.