Terrorism Risk Reminder

Against the backdrop of unrest  surrounding May Day demonstrations, the one-year anniversary of the death of Osama Bin Laden is a reminder of the potential for terrorism attacks.

A bulletin released by the FBI and Department of Homeland Security last week warned of possible terrorist attacks on the one-year anniversary of Osama Bin Laden’s death.

While U.S. authorities said there are no specific, credible threats, concerns remain about “lone wolf† terrorists viewing an attack on this anniversary as “a symbolic victory.†

This is a good time to remind ourselves of the importance of the terrorism risk insurance program – a public-private risk sharing partnership that since 2002 has allowed the federal government and the insurance industry to share losses in the event of a major terrorist attack.

Facts and statistics from the Insurance Information Institute (I.I.I.) reveal that the terrorist attack of September 11, 2001 remains the worst terrorist act in terms of fatalities (2,976, excluding the 19 hijackers) and insured property losses (about $23 billion in 2010 dollars).

Total  insured losses from 9/11, including property, life and liability losses amounted to about $40.1 billion in 2010 dollars.

9/11 losses were paid out across many different lines of insurance, as this I.I.I. chart indicates:

LOSS DISTRIBUTION BY TYPE OF INSURANCE FROM SEPTEMBER 11 TERRORIST ATTACK (1)
($ 2010 billions)

LOSS DISTRIBUTION BY TYPE OF INSURANCE FROM SEPTEMBER 11 TERRORIST ATTACK (1)

(1) Adjusted to 2010 dollars by the Insurance Information Institute using the U.S. Department of Labor BLS Calculator.

Source:Â   Insurance Information Institute.

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