Monday, August 22, 2011
This year marks the 10th anniversary of 9/11 and the cost of terrorism still looms large in United States history.
After close to 10 attack-free years, the $32.5 billion in losses paid out by insurers for the terrorist attack of September 11, 2001, places second in an I.I.I. ranking of the most costly U.S. catastrophes â€“ after just Hurricane Katrina (2005).
As America pauses to reflect on the decade since 9/11, a new book by experts from the RAND Corporation points out that the United States has made many mistakes in its response to the 9/11 attacks and significant attention is needed to correct the nationâ€™s path.
Those errors include overconfidence in rebuilding Afghanistan, launching a war in Iraq that did little to weaken al Qaeda, and many actions that aided jihadist recruiting by fostering resentment toward the U.S., such as the detainee abuse committed at Abu Ghraib prison.
A key insurance-related topic covered by one of the essays in the book is how to compensate victims of terrorism where some early solutions may soon disappear.
In this essay RAND economist Lloyd Dixon and colleagues point out that when the latest extension of the Terrorism Risk Insurance Act of 2002 expires at the end of 2014, the nation will be without a system to fund insurance against losses from terrorist attacks.
The authors suggest that creating a rational compensation system to aid those hurt by terrorism can promote social cohesion and national unity, and contribute significantly to both social and economic resiliency.
â€œThe Long Shadow of 9/11: Americaâ€™s Response to Terrorismâ€ is available at www.rand.org
As the 10th anniversary of 9/11 approaches, a new I.I.I. video featuring I.I.I. president Dr. Robert Hartwig discusses the impact of the event.
Also check out the recently updated I.I.I. paper â€œTerrorism Risk: A Reemergent Threatâ€.