Subject: FW: Reinsurance impact update report: 9/24
From: [email-masked]
To: [email-masked], [email-masked]
Date: Tue, 25 Sep 2001 07:58:33 -0700 (PDT)

FYI
 -----Original Message-----
From: 	Johnston, Robert  
Sent:	Monday, September 24, 2001 5:02 PM
To:	Mcconnell, Mike; Shankman, Jeffrey A.
Cc:	Aganon, Rommel; Tholan, Scott
Subject:	FW: Reinsurance impact update report: 9/24

Attached is a report on the fallout of the NYC/DC terrorism for the insurance sector.

RJ

 -----Original Message-----
From: 	Aganon, Rommel  
Sent:	Monday, September 24, 2001 4:54 PM
To:	Sekse, Per; Marcus, Larry; Hoog, David; Paterniti, Jason
Cc:	Tholan, Scott; Johnston, Robert
Subject:	Reinsurance impact update report: 9/24

Attached is our updated report on the Sept. 11 impact on the insurance/reinsurance industry.  We appreciate your feedback and will provide updated reports upon receipt of further follow-up questions/taskings.

Executive Summary
Immediate short-term impacts are already being felt in the global aviation sector.  Japan's two leading airlines have seen their rates rise sevenfold, amounting to almost US$140 million.  The US airline industry has already secured US$15 billion in government-sponsored financial help, including assistance with insurance and liability issues for the next six months.  
Sources concede that the industry will be forced to change its focus back to risk analysis and be less customer acquisition-focused (in the sense that premiums will need to rise to compensate).  Moody's has already indicated that several insurance and reinsurance companies will be rated negatively following the impact of the attacks.
Other generally accepted long-term impacts include a reduced capital base, higher risks and expected losses, acquisition of smaller players, better investment opportunities for insurers and reinsurers, and possible government involvement.
Several well-informed industry sources have serious doubts about Lloyd's stability.  Most of their policies are not guaranteed.  Significant Lloyd's shareholders such as Ace and XL are also negatively impacted.  
Table 1 shows revised claims estimates to date for the major insurance and reinsurance companies.
Table 2 shows total estimated losses and change in stock price to date for the major insurance and reinsurance companies.