NO INSOLVENCIES BECAUSE OF 9-11:

While the Sept. 11, 2001, terrorist attacks caused insurance companies to pay an estimated $30 to $35 billion in damages and claims in the past three years, the industry survived and terrorism coverage is now considered an expected expenditure, according to a Ball State University finance and insurance professor, John Fitzgerald. “We knew the terrorist attacks had a major impact on the American commercial insurance industry,” Fitzgerald said. “There was this major fear that our insurance industry would be wiped out by these acts simply because of the enormous payouts. However, the only business failures were actually normal exits from the industry. Fitzgerald said some had warned that the cost of insurance against terrorist acts would be so high that some firms would no longer be able to do business. “The study found that while the Sept. 11 attacks initially caused major problems, American businesses have adapted to the changing climate,” he said. “Today, terrorism is simply thought of as a natural part of doing business. It has become a simple risk management issue.” The preliminary results of the study also found the estimate of insurance cost was much lower than the $70 billion figure touted by top industry executives in the weeks after the attacks. The estimate was lowered as victims or their families chose to participate in the federal government’s compensation fund rather than suing for damages.