IRMI Update—Issue #26
An E-mail Newsletter for Risk and Insurance Professionals
ISSN: 1530-7948
October 2, 2001
In This Issue
Colleague,
In my message 2 weeks ago, I expressed hope that the insurance industry would
handle the September 11 tragedy in the same responsive manner that it has dealt
with other disasters in the past. I am happy to report that this is exactly
what seems to be occurring.
I was proud of the responses of a number of industry leaders when there was
speculation in the national press as to whether war risk exclusions might be
used to deny coverage. Indeed, the vast majority of these exclusions do not
apply to the attacks, and leading insurers and industry associations were quick
to issue statements to this effect. (Be sure to see our commentary on war exclusions Part 1 and Part 2) and to register
your opinion on whether the government should establish a terrorism reinsurance
pool. [See reader comments].
The last few weeks have been difficult for me. We lost good friends in New
York. However, I am determined to move forward with life. On Friday, I enjoyed
an uneventful flight from Dallas to attend a conference in Orlando and am glad
I "got back in the saddle." I hope you are also in the process of restoring
normalcy to your life. As you do, remember to be proud of your profession and
the important role the industry will play in recovering from the September 11
tragedy.
I hope to see you at the IRMI Construction Risk Conference in New Orleans
in a few weeks.
Best regards,
Jack
Jack P. Gibson
President
IRMI
Weather Structures Can Help Manage Risks. A
great many corporations and public entities (e.g., cities, towns, and universities)
face a risk that operational revenue will be interrupted or extra expenses will
be incurred not just from catastrophic weather events, which are typically well
addressed by commercial insurance products, but also by continued inclement
weather or weather which is adverse to operations over the long term. An example
is continued heavy snowfall that strains removal budgets for all public entities
or which suspends operations or attendance at public institutions.
The Alternative Risk Transfer community has begun addressing weather concerns
directly either through insurance products, capital products, or financial derivative
products. While derivatives are often used in a speculative manner, they may
also be used as insurance is; that is, to offset financial losses resulting
from abnormal weather patterns.
Many respected financial institutions are involved in weather structures
(referring to all forms of weather risk financing programs). These include household
names in the insurance industry, the banking industry, as well as many other
financial institutions. There are between 25 and 50 active players in this market
and the group is growing.
By: Richard B. Kushner
Director, Tradition Financial Services
Stamford, CT
E-mail: rkushner@tfsbrokers.com
www.tfsbrokers.com
Suggest a Risk Tip. Future issues of IRMI Update will include more risk tips from our readers. Send
us a practical tip (less than 300 words) for identifying and managing risks,
buying insurance, managing claims, or filling gaps in insurance coverages. We'll
acknowledge your contribution as we did for Richard.
We add new Expert Commentary to IRMI.com every week. There are now 206 articles
on IRMI.com, and many more are in production. Below you'll find summaries of
some recent additions with links to the articles.
Attack on America: The
Insurance Coverage Issues—In part 1 of this article,
IRMI research analysts conclude that most property and casualty war risk exclusions
do not apply to claims arising from the September 11 terrorist attacks on America.
In part 2 they explore
how other policy provisions are likely to be applied to these claims.
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If you are interested in participating in the 22nd IRMI Construction Risk
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Click here to learn more about IRMI Construction Risk Conference.
Updated IRMI Glossary
Published—The eighth edition of the popular Glossary of Insurance and Risk management Terms is now available from IRMI. The updated and expanded book provides plain English
definitions of 2,500 terms. It is a very handy desk reference for those new
to the risk management or insurance and is a great gift for clients. It costs
only $24, and substantial discounts are available on orders of 11 or more.
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