The damage caused by two airplanes crashing into New York's World Trade Center will cost insurers billions of dollars, a US industry representative said yesterday.
"It is safe to assume claims will be in billions," said Mr Robert Hartwig, chief economist for the Insurance Information Institute, who witnessed the crashes.
Insurers face claims for damage to the World Trade Center and surrounding buildings, plus the costs of business interrupted while buildings are repaired or rebuilt.
The airlines involved will also face large liability claims which are covered under their insurance policies. The losses would be covered if the crashes were intentional attacks, Mr Hartwig said, as acts of terrorism are covered under insurance policies in the United States.
The world's largest reinsurer, Munich Re, said claims stemming from the attacks could be considerable but they would not threaten the company's stability.
"It is fair to say, based on early details, that the damage claims for Munich Re could be considerable but that the group has already built in provisions, even for damages of this dimension," Munich Re chief spokesman Mr Rainer Kⁿppers said.
He added it would take several days even to begin assessing the damages - it may have to cover as a reinsurer on airplanes, buildings, office contents, or life insurance policies affected by the attacks.
Shares of European insurers and reinsurers tumbled on the news - the worst hit were Italy's Generali, Germany's Munich Re and Allianz and Swiss Re. US shares have not opened for trading. Lloyd's of London could also be affected.
"This is not a markdown, people are actually selling the insurers," said one trader.
