Document Type

Article

Publication Date

Winter 2003

Abstract

Tthe question whether 9/11 has changed the insurance world cannot be answered simply In some respects, nothing is different, but it is difficult to be sanguine about this assessment. Terrorism is less predictable in terms of magnitude and frequency of loss, and this raises doubts about the capacity of the industry with respect to future events. Until the uncertainty with respect to the terrorism risk abates and markets stabilize, problems of cost and availability will persist. This, of course, has been true in other insurance sectors in the past, and temporary dislocations do not necessarily justify government intervention. If, however, terrorism is different enough to prevent the market from developing affordable, available coverage, then a government role is appropriate.

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