ACE Denies WSJ Report on War Exclusion

Bermuda’s ACE Ltd. issued a strongly worded statement on Wednesday denying implications in an article in the Wall Street Journal that it might invoke the “war risk” exclusion clause contained in many insurance policies for claims resulting from the catastrophe of September 11th.

The bulletin reiterated the company’s previous estimates that its exposure would be around $400 million, and stated that “In making this estimate, ACE believed that the War Risk Exclusion was not an issue. The company fully intends to pay all of its claims. ACE has no intention of denying any claim on the basis of the War Exclusion.”

The article quoted an ACE spokeswoman as saying that it was “too soon to tell” whether any exclusions would be invoked. In fact the WSJ pointed out that most insurers, including AIG, Chubb and Hartford had categorically ruled out applying any “war risk” exclusions. It also said most insurers would probably follow these industry leaders, and pointed out that Berkshire Hathaway’s decision to cancel its agreement to buy $500 million worth of Finova Group’s notes was based on different language and included other circumstances.