Macquarie Journal of Business Law
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SHARON BERKEFELD
The events of September 11, 2001 are widely acknowledged as ‘events that changed our lives and world forever’. Our world was to change not because of any new threat but because an old threat was to re-emerge into our lives, having reinvented itself, and remodelled itself in such a way that was unforeseen and unquantified by the men and women who lead our nations.
Terrorism is not a new threat but the nature of this new breed of terrorist is, as they have evolved into something so horrific and so bent on hatred and destruction that they are simply unable to tolerate any of the previous boundaries of humanity that were considered by the generations of terrorists before them.
“Before Al Qaeda, never before had there existed a terrorist organisation that possessed the ruthless ideological intent to cause maximum loss; the trained personnel and logistical capability to launch spectacular suicide attacks against western interests; and the patience in undertaking surveillance to identify and exploit defensive weakness.” [1]
Overshadowing this was the blatant disregard for human life that had not previously existed in terrorism groups such as the IRA who had shown the capability to exploit opportunities to launch attacks on the British mainland such as the bombing of London and the Lockerbie Air crash but were simply unable to maximise casualties in human loss and to prevent this issued vague telephone warnings in which details of the attacks were given to authorities by the terrorists.[2]
“For Al Qaeda, martyrdom missions are the standard means of prosecuting the Jihad. There are no moral constraints on Al Qaeda attack; no concerns for the lives neither of the operatives, nor for the number of their victims, some of whom may well be Muslims. The robotic calculated rationality of Al Qaeda decision-making allows attack decisions to be optimized, like moves on a chess board, without the emotional interference of moral concerns over human welfare.”[3]
These people, these practices and these events that they caused have rewritten insurance industries policy, government legislation and business practice around the globe and changed all of our lives forever.
Much has been written and we’ve all seen the footage of that horrible day when four airliners were hijacked as they left their respective airports of Boston, Massachusetts, Newark, New Jersey and Washington, DC bound for their respective destinations unbeknown to anyone on board that there were 4 or 5 hijackers of middle-eastern appearance about to brandish their own insane destruction on the world. These hijackers with ‘military precision’ took over these planes killing the crew and gaining “control of what amounted to four guided missiles, brimming with tens of thousands of gallons of jet fuel”.[4]
At 8.46 am, the first plane, an American Airlines flight 11, that had originated in Boston and was bound for Los Angeles slammed into the North Tower of the World Trade Centre in Lower Manhattan. Seventeen minutes later while the world watched their television screens, at 9.03am a United Airlines flight 175 also from Boston bound to Los Angeles crashed into the south tower of the World Trade Centre. At 9.43am, a third hijacked plane American Airlines flight 77 from Washington to San Francisco slammed into the Pentagon. Meanwhile brave passengers on the last hijacked plane, United Airlines flight 93 from Newark to Los Angeles, prevented the hijackers from overtaking the plane and instead caused the plane to crash into a paddock in an area south of Pittsburgh, Pennsylvania at 10.10.am This action prevented the plane from reaching its target destination which was believed to be the ‘White House’.
At 10.05am having suffered considerable damage to its structure and engulfed in flames the South Tower of the World Trade Centre collapsed as did the North Tower at 10.23 am killing all of the people trapped inside the building and almost all of the 400 fire-fighters and police officers attempting to save their lives. The collapse of the North and South Towers caused the fire to spread, and this combined with the force of the impact of both buildings collapsing caused significant damage to surrounding buildings and shrapnel to rain down on a wide area of Manhattan.[5]
“A dense cloud of acrid, black smoke shrouded much of lower Manhattan, plunging in into a toxic darkness. A thick coating of fine grey ash and pulverized concrete settled over much of the area, infiltrating thousands of homes, businesses, machines and countless pieces of equipment.”[6]
The greatest tragedy in the history of the world to date had been man made only to be outdone in recent years by the events of hurricane Katrina in New Orleans.
The tally of losses is best described by Robert P. Hartwig, Senior Vice President & Chief Economist of the Insurance Institute who was also an eye witness to the events of September 11 as;
“Within a span of less than 100 minutes, more than 3,000 people had been killed and 2,500 injured. Two of the world’s tallest buildings had collapsed and 16 square acres of some of the most valuable real estate on earth - 26 percent of all the office space in Lower Manhattan (31 million square feet) - had been reduced to rubble. Moreover the Pentagon had sustained serious damage and four large commercial aircraft had been lost”. [7]
The cost in human tragedy alone is as follows;[8]
WTC Victims (workers and visitors) 2666
WTC hijacked jets (incl. 10 hijackers) 157
Pentagon victims on the ground 125
Pentagon hijacked jet (incl. 5 hijackers) 64
Pennsylvania jet crash (incl. 4 hijackers) 44
Total 3056
September 11, 2001 produced insurance losses estimated at $32.5 billion calculated in 2001 dollars; the cost in human life was as detailed above an estimated 3056 people who came from 90[9] different countries around the globe; the injuries were estimated at 2250 people.[10] This insurance loss affected nearly 150 insurers[11]the most significant effect being on the European Reinsurers who absorbed two thirds of the insurance cost of 9/11.
According to the Insurance Institute the estimated effects on the various insurance lines was as follow;
The event, according to Researchers in Risk Management, Ermann Michel-Kerjan and Burkhard Pedell[13] demonstrated the possibility for highly correlated risk at different levels.
“First, multiple lines were affected instantaneously by 9/11 such that commercial property, business interruption, workers compensation, life, health, disability, aircraft hull and general liability lines each suffered catastrophic losses.
Secondly, there is now a well-recognised possibility for several catastrophic attacks to occur simultaneously in different densely populated or industrialised locations. Hence, this event confronted the insurance and the reinsurance industries with an entirely new loss dimension”[14]
In addition to the estimated insurance loss there is also a total estimate economic loss of $83 billion in New York City alone.[15] This includes damage and injuries to those who were not insured, underinsured, businesses faced with insurability or retentions and coinsurance provisions. It also includes loss of business income and tax revenue, and additional costs involved in dealing with the disaster like the cleanup costs. Finally there was the effect of other losses including the community where it was estimated 125,000 people lost their jobs in the fourth quarter of 2001. This number was to improve but by 2003 this loss would still be 57,000.[16]
The government contributed $20 billion in aid to New York while charity aid gave 1.5 billion. [17]
On the 26th of April 2001 the Board of Commissioners of the Port Authority of New York who had previously built the World Trade Centre (WTC) and had since managed it as a public resource awarded Silverstein Properties and the mall owner, Westfield’s America a 99 year lease on the complex.[18] The new owners acquired along with the assets an insurance policy for the complex that included a clause that in the event of a terrorist attack that the partnership could collect on the insured value of the property, and be released from their obligations under the 99 year lease.[19]
The lease deal did not close until the 24th of July 2001 just 6 weeks before the attacks on the WTC. By December 2003 the Port Authority had agreed to return all of the $125 million in equity paid by the consortium to purchase the complex back.[20] Silverstein Properties took action in addition to receiving this money against its first party property insurers for the destruction of the complex. These insurers of which there were 25 providing multi-layered insurance coverage at this stage were only bound by an interim policy (i.e. binders). This multi layered insurance program provided for a total ‘per occurrence’ limit of indemnity of US$ 3.5468 billion. The crucial issue before the courts would be whether the events of 9/11 constituted one or two occurrences and therefore whether the insurers had to pay $3.5468 cap on the buildings once or twice.[21]
The court battles were set in 3 stages. The first court battle ended in May 2004 and found that 15 of the insurers were bound by a specimen property insurance form (now known as the WilProp) that had been issued by Silverstein’s Consortium Broker – Willis. This form stipulated a maximum or ‘aggregate’ limit of indemnity which the insurers must pay for damage caused by a ‘single occurrence’. The advantage of this clause was that it limited both the insurers’ exposure to loss and also the insured excess to one payment. The WilProp form defined the word occurrence as;
“Occurrence shall mean all losses or damages that are attributable directly or indirectly to one cause or to one series of similar causes. All such losses will be added together and the total amount of the losses will be treated as one occurrence irrespective of the period of time or area over which losses occur” [22]
The outcome saw the court find that there had only been one occurrence and therefore limited the indemnity for the insurers to one payment.
The second round of court battles which ended on the 6th December 2004 was decided with reference to the New York’s common law as the other party Travelers Insurance, the lead underwriters of the nine other insurers, had rejected the Wilprop Form and offered its own specimen insurance form in which it omitted to define the word ‘occurrence’.
The jury in this case found that in fact two aircrafts had impacted into the twin towers, resulting in two fires and two building collapses and that these were two separate occurrences, which meant these insurers were liable to pay the maximum limit of their indemnity twice.[23]
The third phase of the WTC litigation was the appraisal of the WTC’s value as at 9/11. The appraisal involved an ‘arbitration like’ process whereby the appraisers for the Silverstein parties and the insurers negotiated the value of the loss before a neutral umpire.[24]
The lesson from the WTC litigation was “that all parties to an insurance contract should endeavour to secure contractual certainty as soon as possible.”[25]
Dating back to the 18th century[26] property casualty insurance provided protection for “all names peril”. This meant that insurance coverage was provided for items specifically listed on insurance policies. During the 1930’s this changed from being cover for all “named peril” to covering “all peril” except those specifically excluded from policies such as “acts of war”. The exclusion of war risk has been found in virtually all nonlife insurance contracts since the 19th century and reflects the realisation that the resultant damage is fundamentally uninsurable.[27]
Property and casualty insurance premiums prior to 9/11 were either ‘silent’ with regard to terrorism insurance or included it as an ‘unnamed peril’[28] in all standard ‘all risk commercial policies’ and in ‘home owners’ policies as ‘general property or casualty policies’ which covered damage to property and its contents. It many instances it was provided effectively free of charge[29] or listed as an inclusion in the policy at a relatively inexpensive rate of insurance.
The market for this type of insurance (property and casualty policies including acts of terrorism) prior to 9/11 could be generally described as liquid and readily available at highly competitive premiums.[3] This was even considering the previous terrorist attack on the World Trade Centre in 1993 and the Oklahoma City Bombings in 1995. It is fair to say that “never before had it been perceived as a political risk by underwriters, nor been priced by actuaries, as a genuine catastrophic risk.”[30]
The greatest impact of all was felt in the US insurance market although the effect of 9/11 rippled around the globe. It is important to remember that it was the European reinsurers who footed the bill for two thirds of the $32.5 billion insurance bill.
Insurers and reinsurers post 9/11 were quick to assure the market of their ability to cover the costs of these attacks. They were quick also to dismiss the actions as an “Act of War” which would have meant that the insurers and reinsurers were not liable for these costs under their insurance contracts. The view held by many was that had the insurers attempted to claim the act as an ‘act of war’ that it would not have stood up to a court challenge.
Hence in the aftermath of Sept 11, primary insurers found themselves with;
Faced with these issues, insurers determined that “terrorism was an uninsurable risk” and followed reinsurers from the market for terrorism insurance. For the reinsures leaving the market was much easier as unlike primary insurers, reinsurers are not governed by legislation and form part of global market for funds regulated by contract law which typically have contract periods of 1 to 2 years which generally have expiry / renewal date in either July or January.
In comparison the primary insurance market in the USA is one of the most highly regulated in the country and is individually regulated in each State. In October 2001, the Insurance Industry Office (ISO) on behalf of the industry filed requests in every State office to exclude terrorism coverage from all commercial insurance policies. In early 2002, this had been permitted by 45 states the only exception being workers compensation coverage. Thus by 1st August 2002 most insurance firms had fled the market.[31] The few insurers that did provide cover to clients did so at extraordinarily high prices. For example Chicago Airport prior to 9/11 carried $750 million of terrorism insurance at an annual cost of $125,000, after 9/11 their insurer would only offer them $150,000 million of cover at an annual cost of $6.9million.[32] By September 2002 very few businesses across the US had terrorism insurance.
As the insurers left the market the fundamental risk of any future terrorist attacks fell on the people would have been the subject of the attack, the businesses and their employees, lenders, suppliers, and customers.
The impact on business and the economy is well documented. Lenders and investors stopped lending money as the cost of these loans and interest rates did not historically factor in the risk that asset that they had lent money on could be destroyed by an act of terrorism and they like their client would loose their money as there was no insurance available. As lender were exceedingly uncomfortable with this increased exposure they stopped lending money especially in high risk areas or projects they judged to be high risk thus halting or delaying many projects. The airline industry already in trouble and now facing ruin successfully partitioned Congress and the Bush Government for a Federal payout of $5 million in cash grants, $10 million in loan guarantees and established an open ended tax payers fund to compensate and pay claims against victims and their families killed in the tragedy, but more significantly to reimburse the airlines for increased costs of their insurance premiums.[33]
The market for stand-alone terrorism insurance grew. Prior to 9/11 this had been a market of last resort mainly used by companies wishing to invest in high risk terrorist countries such as Columbia, Sri Lanka and Algeria. Lloyds and AIG typically providing cover.[34] After 9/11, demand for this type of cover substantially increased as companies were able to charge high rates for this product that was fuelled by high demand and this allowed new players to provide insurance to this market.[35] In the 12 months after 9/11 the US market contributed to more than 50% of all the worlds’ stand-alone insurance policies.[36] The introduction by the US government of TRIA saw the competition in the market increase and overall rates declined by 40-50% with the exception of location hot spots or high risk terrorist strike areas. Stand Alone insurance has continued to develop along side TRIA providing an alternative to the governments package.
In November 2002 after much debate the Government provided and today still continues to provide a temporary solution through The Terrorism Risk Insurance Act 2002 (TRIA). This is a public/private risk sharing partnership, whereby the Federal Government and the insurance industry share in any losses that result from a terrorist attack according to a specific formula.[37] The initial package was for a two year period but was extended after much debate in 2005 for a further two years until December 2007. Currently a Bill is before Congress to extend the legislation for a further 10 years, although opposition to this proposal is coming from the Bush Administration who will only offer a 2 or 3 year extension and has objected to many of the proposals.[38]
TRIA is considered successful as it enabled a market for terrorism insurance to develop with the federal backstop effectively limiting the insurers’ losses, and greatly simplifying the underwriting process.[39] The intension that it gave insurance companies time to assess their exposure to terrorism losses and learn how to price and underwrite these policies was also achieved.[40] Since its introduction there have been a number of modifications and there are even more muted in the current Bill before Congress.
The legislation requires all property and casualty insurers to make terrorism coverage available to all commercial policy holders on the same terms and conditions as if offered in their non-TRIA coverage.[41] If the insured rejects the offer then the insurer may then reinstate a terrorism exclusion clause. A business that does not purchase TRIA or any other kind of terrorism insurance will not be covered for damage caused in a terrorist attack. The “make available” provision applies to commercial lines of property and casualty insurance. Insurers can offer this option to individuals if they choose.
The specific provisions of the legislation are;
Businesses who take up the terrorism option under commercial policies are covered for loss and damage caused in the event of a terrorist attack. Businesses that refuse this option remain uninsured and live in the hope that if they are affected by a terrorist attack that the government will bail them out. Alternatively they can choose to make different arrangements with their insurers which include CAT Bond or stand alone policies.
Under TRIA damages caused by domestic attack, a formal declaration of war, or an attack using nuclear, biological, chemical or radiological weapons are not insured
Business interruption insurance depends on the individual policy arrangements as to waiting periods and time covered. Business interruption losses associated with acts of civil authority are limited to the physical loss or damage arising from the peril. Loss of business income associated with fear of travelling to certain areas, or the closure of areas by authorities are not covered.[58]
The business community addressed concerns that TRIA revolved around the exclusions of domestic, nuclear, biological, chemical and radiological terrorism and the interplay between terrorism and acts of war. These issues are currently being considered by Congress as part of the decision to renew TRIA post Dec 2007.[59] Other concerns addressed pricing and the new policy language of the legislation but these fears appear to have dispelled over time.[60]
1 Businesses Alternatives to TRIA - Catastrophic Bonds (CAT Bonds)
CAT Bonds are the private market answer to providing funding for catastrophic risk like terrorism. They function by transferring some of the risk and costs of these events to capital markets away from the insurance/reinsurance industry. These securities take the form of bonds which pay investors a premium interest rate to accept the risk of non payment (losing the entire principal invested) in the event of a catastrophic event which is defined in either physical terms such as a hurricane or earthquakes of certain magnitudes or by industry-wide or insurer- specified losses.[61]
A key issue to the structure of CAT Bonds is the definition of the trigger event which releases the issuer’s obligation to repay. Ironically in the aftermath of cyclone Katrina CAT bond investors were limited from payment of these bonds by the wording of these ‘trigger conditions’- including the wind speed being too low; the barometric pressure too high; and the aggregation of the loss incurred being less than that required to trigger a payment. Consequently the insurers that issued the CAT Bond were left paying policy holders themselves, demonstrating what some suggest is the inability of these bonds to function like reinsurance and cushion the insurers from the financial blow.[62] CAT Bonds have not been the successful alternative to either TRIA or Stand Alone insurance that many forecasted as;
Proponents suggest that market awareness will improve their viability.
2 The Business Alternative to TRIA - Stand Alone Insurance.
The stand-alone terrorism insurance market is seen as a market of last resort provided when adequate cover is unable to be obtained from property risk insurers. The US is by far the largest buyer of world wide stand alone premiums contributing to 50% of the market post the introduction of TRIA.[69] The market like the general insurance market gradually dropped its price after its initial knee jerk reaction to 9/11.
A report by AON Crisis Management in March 2006 suggests that the market continues to rise as prices fall, and as brokers and insures continue to redefine the products available including; the increased use of captive insurers, self insured retentions, hybrid programmes and other risk management tools. AON also expects that the market will grow in the future as the perceived risk of terrorism attacks increase; the impact of a court decision in the US that found that banks do have a right to require borrowers to have terrorism insurance on securities; and the possibility that the US government will not renew TRIA beyond 2007.[70]
Individuals are coved independently from TRIA under their homeowners’ insurance policies, standard renters’ policies, and co-op owner policies as they all cover damage to property and personal possessions resulting from fire, explosion or smoke which are all consequences of a terrorist act. Specific terrorism insurance must be taken out to cover damage to common areas used by renters and condominium owners’.[71] Motor vehicles with comprehensive insurance policies have terrorism insurance included. If the car is leased or financed as a condition of the loan or lease it is now a requirement to have cover for terrorism.[72] Life/health/disability insurance policies may include terrorism coverage for death, injury or sickness but only by inclusion between the parties.[73]
Life insurance policies do not contain terrorism exclusion clauses and proceeds are paid to beneficiaries upon the death of a person after a terrorist attack.[74]
Attacks by terrorists using nuclear, biological, chemical and radiological means are excluded in these policies, as are acts of war.
Attacks by domestic terrorists are included in these policies as they are written in terms of the damage caused from fire or smoke.
Workers compensation is a line of compulsory insurance and covers employees injured or killed on the job and therefore it automatically includes coverage for acts of terrorism and by law can not be excluded.[75]
Although the insurance industry lobbied heavily for government intervention and the introduction of TRIA the industry has raised concern about it. Concerns raised include TRIA legislates that insurers’ participate in the program and requires them to carry more risk than they had done previously.[76] Other concerns include that deductibles are too high, though as time has passed and no attacks have occurred insurers have been able to build up these reserves and consequently this issue seem less of a concern.[77] There were also concerns raised about the volume of new legislation that went with TRIA as in addition to the new Federal Law as insurance in the US is regulated on a state by state basis all the states enacted their own piece of legislation as well which on occasion conflicted with TRIA. (E.g. Florida)[78] Time and experience has either rectified or improved these concerns.
The insurance industry survives on its ability to spread risk across a wide pool over a short time frame and functions best under conditions where individual exposures are independent of each other; losses are accidental or unintentional so that the insured cannot affect the probability that the loss will occur; losses are generally predictable; insurance markets are competitive; and price is able to be determined from statistical extrapolation of future losses from a large number of individual risk exposures.[79] Terrorism risk fails to meet these criteria and in addition presents other challenges for the insurance industry. Namely;
These issues have fuelled much of the debate as to whether terrorism should be a function of the insurance industry and therefore the private sector or whether terrorism is an issue solely of national security.
The initial take up rate of TRIA insurance was much lower than expected. The reasons for this were;
More recently however there has been a significant increase in the take up rate of terrorism policies which has been attributed not only to the decrease in pricing of the coverage but also due to heightened terrorist concerns by the government.[86] In addition many corporate governance polices make it imperative for management to drive plans that mitigate their exposure to terrorism risk and protect both company assets and individuals from third party claims or shareholders derivate actions.[87] While directors and officers’ insurance and lenders insurance policies both require terrorism insurance on any for underlying Property and Casualty insurance policies to protect their commercial investments.[88]
However until the government makes terrorism insurance compulsory as it is in other parts of the world there will continue to be this dual issue of under insurance and who pays for it in the event of an attack. This may mean that an attack the size of 9/11 would leave many business and markets worse off than they were post 9/11 when all firms were covered against terrorism by default and the losses were diversified on the world wide insurance and reinsurance markets.[89]
There has been much debate in the US over the involvement of the federal government in terrorism insurance, the future of TRIA and if it is to go forward what form is appropriate. The fundamental reason suggested as to why the federal government should be at least the “insurer of last resort” is that the government is ultimately responsible for the actions of the terrorist who are responding to government policies and actions or inactions in certain areas. Consequently terrorism risk is intertwined with national security and is not an issue for the insurance industry. Some feel that in the same way as the government has a duty to provide physical security measures, it also has a duty to continue to share the risk of insuring against such events.[90] The national security infrastructure also relies on terrorism insurance for the continuity of economic and social structure after such a catastrophic event.[91]
From the insurance industry prospective terrorism insurance posses many issues which they have difficulty dealing with including; the ongoing issues of effectively pricing the cost of terrorism which unlike other catastrophic events such as hurricanes and earthquake presents a set of different characteristics which are difficult to accurately model, including; limited relevant data, difficulty to quantify probability, dynamic uncertainty[92] and the fact that terrorism is man-made crisis. A second issue for insurers is that unlike the government, insurers do not have the ability to spread the cost of catastrophic events across the whole population for generations to come, their ability to spread risk is limited to insurers and reinsurers and this may, in the event of a mega catastrophe result in liquidity problems and possible insolvencies which would have a significant impact on the whole market.[93] Investment markets answers such as CAT Bonds have also proved to provide an inadequate solution to this problem as demonstrated by Cyclone Katrina.
In 2004 a survey conducted by the General Accounting Office (GOA) concluded that since 9/11 insurers and reinsurers have done little to develop a private industry program that would provide sufficient capacity without government intervention.[94] The private sector especially reinsurers, have demonstrated an unwillingness to regrow the market. Some economists suggest that the private market has the capacity to develop a reinsurance market but is limited by the governments’ involvement through TRIA. Others suggest that tax, accounting and regulations changes would make it more attractive for insurers to enter the market if they could hold surplus capital and allow prices to adjust freely.[95] Many commentators simply disagree.
Acknowledged throughout this debate is that TRIA has successfully achieved its objectives of: ensuring the widespread availability and affordability of property and casualty insurance for terrorism risk; has allowed a transitional period for the private markets to stabilize and resume pricing for such insurance; and provided time to build capacity to absorb future losses from another terrorist attack.[96]
The arguments going forward continue to suggest that the non renewal of the TRIA legislation would leave many insurers and a wide range of businesses, organisation and individuals that they service, vulnerable to economic disaster in the event of a catastrophic terrorist attack.[97]
My considered view is that the US government must renew TRIA when it expires in December 2007 in a format which addresses the continually low take-up rates by property and casualty policy holders. I consider greater success would be achieved if greater consultation is given to a broader array of market participants, including end users as this would help determine what it is that users want and are prepared to pay. I consider that terrorism insurance should no longer be treated as a policy decision of government with limited consultation, with the insurance market.
I believe that a private-public partnership is the answer as it insures that both the private sector i.e. insurers continue to remain protected against extremely large losses and this in turn provides stability to the investment market post an attack while at the same time this arrangement ensures that the government continues to fulfil its elected duty of providing national security. Furthermore I consider that the US government would be committing a morale travesty by failing to renew TRIA, even if it is in its current format as market research has indicated that if nothing else TRIA binds insurers to the property and casualty insurance market and these insurers have demonstrated that given an opportunity where they are no longer cajoled by the government through legislation into this market that they would leave as they did post 9/11. Insurers are businesses and businesses only make decisions they hope to make profits from, therefore they will only make insurance available to the market while ever they are able to protect themselves against the potential for catastrophic losses by either purchasing reinsurance or securing risk in the private market through instruments such a CAT Bonds. If this is unavailable then they will simply refrain from offering this insurance. This would result in businesses being left in a much worse position than they were pre 9/11 when insurance policies were silent on terrorism and all businesses with property and casualty policies were insured against an attack.
The lack of availability of reinsurance was highlighted in a United States General Accounting Office (GOA) reports in 2004[98] that indicated that since 9/11 reinsurers have continued to demonstrate a reluctance to re-enter the market for this type of insurance indicating either a lack of capacity or that it is simply a bad investment decision.
TRIA also ensures that the government provides re-insurance free of charge. The questions that must be considered here is whether reinsurers who are currently reluctant to fill this role will fill the vacancy left by the government departure and if they do at what price? Will this price be affordable for property and casualty policy holders or will premiums sky rocket and price businesses from the market?
In my opinion the outcome if the government fails to renew TRIA will result in a resumption of the post 9/11 situation where very few businesses had insurance against a terrorist attack and those that did, had policies that provided very little cover, at very high premiums. This means of course that the people, businesses and supplier most affected by an attack would be are left with the burden of the attack and this would be a major disaster. Therefore the government must intervene in its national security role and addresses the disaster aided by the administrative capacity of the insurance industry and facilitate the processing of much needed resources.
I see the current advantages of TRIA are:
It is my view that the Government however should make terrorism insurance mandatory on all property and casualty insurance premiums. This would have three obvious outcomes in that:
I believe that domestic terrorism should also be included under TRIA and that more debate should focus on whether other types of attacks including nuclear, chemical, radiological and biological should be included under this legislation.
I also think debate should consider whether terrorism and its insurance are a new phenomenon that may require us to consider a new way of looking at how we provide for and facilitate it .This for example may see government ultimately responsible for all the costs associated with an attack but the facilitation of support to victims being provided by the insurance industry for a fee. Alternatively it may take some other form. Debate on the topic is what I am stressing.
It is important that we do not forget what happened post 9/11 when insurers and reinsurers left the market or if they didn’t, they provided minimal cover at exorbitant prices leaving the market and the wider community it supports completely unprotected and this in the event of another attack would result in another unmitigated disaster as was illustrated recently in cyclone Katrina.
As the events of 9/11 rippled around the globe insurers and reinsurers in Australia like their US counterparts left the market for terrorist insurance or made cover available at very high premiums that offered low maximum coverage. The outcome created uncertainty for commercial property investors, lessees and financiers.
The governments’ response to this market failure was to introduce legislation in 2003 known as The Terrorism Insurance Act 2003. This Act created a reinsurance pool that covers the insurance company losses, company losses from property, business interruption and third party liability coverage. It does not cover Federal and State Governments as they are self insured except where property is owned by government enterprises. The scheme involves the accumulation of a cash pool of $300 million which is funded by the collection of premiums from insurers. This is backed by a commercial line of credit of $1 billion and then the Government provides indemnity of $9 billion, giving a total of $10.3 billion pool to cover damage from a terrorist attack.[99]
The legislation established a statutory authority – the Australian Reinsurance Pool Corporation- who provides this reinsurance cover. Insurers do not have to use this pool; however those that do are required to retain a certain amount of terrorism risk for 12 months which is set as the lesser of $1million or 4% of the insurers ISR premiums collected to a maximum industry retention level of $10 million per event. The Treasurer sets this rate and the premium amount charged to insurers for this reinsurance cover. This premium amount is used to fund the $300 million pool. The Treasurer is also responsible for determining how insurers will be charged if the damage bill from a terrorist attack exceeds the $10.3 billion and loans are required to cover the difference.[100]
The legislation compels insurers to provide terrorist cover on all commercial property policies starting from 2% to a maximum of 12% of the related property insurance premiums depending on the location. The scheme is compulsory in order to spread the cost of this cover across a broad base and keep premiums to a minimum. Classes of insurance not covered by the scheme include private residential property, marine and aviation, workers compensation and CTP insurance. Farmers must have business interruption insurance to be covered. The scheme does not cover acts of war or damage resulting from a nuclear attack but does include attacks of chemical or biological warfare. The Treasurer in consultation with the Governor General determines whether an attack is a terrorist attack or an act of war[101] and the assets must be based in Australia.
The governments’ objective is to operate the scheme until terrorism cover becomes commercially available at reasonable terms. After a review in 2006 it was determined to continue with the programme as the scheme has been hailed as a success. Kerrie Kelly Chief Executive of the Insurance Council believes that “without the scheme, insurance would remain difficult to obtain and if available would be prohibitively expensive”[102] The Council has said that the scheme has allowed investment in infrastructure to continue around Australia.
There are however a number of issues going forward including what happens to premiums when they reach the $300 million pool; the level of retention required by reinsurers; how premiums are charged;[103] and the fact that not all lines of insurance are included specifically private property. These issues are currently being resolved.
The United States was not the first country to establish terrorism insurance programs. Consorico de compensation de ‘Serguros is the oldest program in Europe and was established in Spain in 1954. While many countries responded to 9/11 by establishing terrorism insurance programs, others already had pre existing programs following earlier terrorist attacks on their own soil. A brief overview of some of these programs follows;
Pool Re was established in 1992 in the wake of the IRA terrorist attacks on the city of London after which British insurers excluded terrorism coverage from all commercial policies. Pool Re makes the U.K Treasury the insurer of last resort guaranteeing payment above the industry retention which increases each year. Primary insurers pay the entire claim for terrorist damage and are than reimbursed by the pool for losses above a certain amount per event per year. Post 9/11 the program was extended to cover “all risks” (including damage caused by chemical, biological and nuclear contamination) in the UK only. Membership to the Pool is not compulsory and premiums which were doubled since 9/11 are calculated as a percentage of the total sum insured under fire and accident policies depending on the location of the risk. Insurers set premiums for the underlying terrorism policies which cover both damage to property and business interruption.[104] [105] [106] [107]
Northern Ireland is specifically excluded from the program[108] as the Northern Ireland government provides its own terrorism insurance that specifically excludes cover from local terrorism risk and since 1978 has made provision for criminal damage compensation orders which compensate on an indemnity basis for property damage and business interruption.[109]
Consorico de compensation de ‘Serguros was established in 1954 following acts of violence carried out by the Basque separatist movement. It is a compulsory government sponsored but privately managed pool which provides coverage against injury, property damage and business interruption resulting from all “extraordinary risks” including both natural disasters and phenomena with political social effects or man made disasters such as civil commotion, rebellion and terrorism. Private insurers may provide additional catastrophe insurance but they must still make payment to the government pool which is backed by an unlimited guarantee by the government. Premiums are determined depending on the location of the risk and the amount of coverage required. Following 9/11 business interruption insurance was included in the program. The insurance pool post the terrorist attack in Madrid, Spain on the 11 March 2004 covered the majority of the losses from this attack with the exception of damage to government trains and life insurance.[110] [111] [112] [113]
Laws were passed in 1986 in France ensuring terrorism insurance was included in all commercial policies. Post 9/11 a reinsurance pool providing unlimited coverage was established to cover damage resulting from a terrorist attack above a specific amount. Membership of the pool is obligatory and insurers pay 10% to the government for this reinsurance cover. Premium rates depend on the insurance value of the property not the location and range from 6% to 18%. There is limited nuclear exclusion and acts of sabotage are included. Policies cover both property and business interruption insurance for commercial, industrial and professional risk. [114] [115] [116] [117]
In Israel terrorism insurance is specifically excluded from standard property policies but the private insurance market provides separate cover. Reinsurance cover is provided by catastrophe excess of loss treaties. In addition, the state of Israel covers property damage losses triggered by politically motivated violence including terrorism through Property Tax and Compensation Fund (PTCF) which was established to cover property losses resulting from war and warlike activities.[118]
Austria established a pool in January 2004 providing reinsurance protection against property damage and business interruption up to a certain limit. Participation in the pool is voluntary.[119] Post 9/11 the Netherlands also established a terrorism reinsurance company to insure member companies who retain a percentage of the risk. Coverage is limited per member and in aggregate and includes life, health and property/casualty, travel, motor vehicles and vessels[120] there is no extra premium charged for this cover. Switzerland allowed insurers from 2003 to cede all property risk insurance for sums above a certain amount to a reinsurance facility. Other countries that have government terrorism insurance include Germany, India, Namibia, Russia, South Africa Turkey, and Sri Lanka and in Belgium it is expected from January 2008.[121] [122] [123]
Insuring against the cancellation of the Olympic Games was not contemplated before 9/11. After this attack the insurance industry was reluctant to cover terrorism and consequently the Winter Olympic Games in Salt Lake City in 2002 were uninsured. By the time the Olympic Games were held in Athens in 2004 the industry had restabilised resulting in the Olympic Officials taking the unprecedented step of buying a $170 million insurance policy to cover the risk that the games could be called off because of war, terrorism earthquake or flooding. The policy guaranteed that the Organisation, Affiliated National Committees, and Sports Federations had enough money to continue operating if this occurred but the policies did not compensate individual athletes, corporate sponsors or TV network.[124] [125] Alternative arrangements were sought by these parties. IOC President Jacques Rogge commented at the time that “taking out a policy to manage the risk associated with one’s core business is standard, prudent behaviour for any modern organisation”[126]
The 2008 Beijing Olympic Games will have similar cover. In November 2005 PICC Property and Casualty Co. Ltd (PICC P&C) were named the official insurance provider for not only the Olympic Games but the Para Olympic Games, the Beijing Organising Committee for the games, the Chinese Olympic Committee and the Chinese delegation to the 2006 Winter Olympics in Turin, Italy.[127] In addition to this PICC P&C has written a policy to cover personal accident and medical insurance for all pre-game and game volunteers.[128]
In October 2005 Marsh, the worlds leading risk and insurance services firm were appointed to provide insurance consulting and risk management services for the games. Together with China Sport Insurance Brokers Co. Ltd they will work together to assess and identify risk; provide loss prevention and risk control planning and implementation; claims management; contract management and analysis; contingency planning and global project management.[129]
Security for the games will include 100,000 security personnel of which there will be 40,000 police, 27,000 armed police and thousands of security personnel and volunteers. This will be complemented by aerial patrols by helicopters, and significant digital and communication devices, a more unorthodox approach will involve the use of white mice as food tasters.[130] All these actions are undertaken to mitigate the risk of a terrorist attack.
Insuring world events against terrorism or its threat has become the norm since 9/11. In 2006 for the World Cup soccer Championships in Germany a CAT Bond was used by Credit Suisse for securities of $260 million against cancellation of the tournament due to terrorism. The World Cup Bonds spread the financial risk of terrorism across capital markets paying a high yield while subjecting the holders the risk of loosing 75% of their capital.[131]
The question that was asked addressed the role that the insurance industry has to play in insuring against acts of terrorism. The answers to this I think depend on whether you consider terrorism as an issue of national security or not. As an issue of national security the government’s involvement and responsibility is not only necessary but fundamental. Alternatively if you consider that it is an issue for the private market then you need to consider whether there is both the interest and capacity within the market to supply this insurance and if so whether the price is affordable. Consideration also needs to be given to understanding the implications for the insurance industry if the private market is either not interested or simply too expensive.
My view is that public– private pooling systems appears to provide a balanced solution to this problem and my research has indicated that although they may vary in solution that this is generally the approach taken around the globe as it provides dual accountability between governments and the community and the insurance and investment markets.
Finally I do consider that there is an argument that supports the view that terrorism insurance will be more effective if it is made mandatory on all property and casualty policy holders.
[1] Dr Gordon Woo “A Terrorism Risk Analyst’s perspective on TRIA”.
[2] Ibid.
[3] Ibid.
[4] Robert P Hartwig “One Hundred Minutes of Terror that Changed the Global Insurance Industry Forever” Insurance Information Institute September 11, 001:The First Year.
[5] Ibid.
[6] Ibid.
[7] Ibid.
[8] Ibid.
[9] Erwann Michel-Kerjan and Burkhard Pedell “Terrorism Risk Coverage in the post 9/11 Era: A Comparison of the New Public-Private Partnership in France, Germany and the U.S.” Wharton – Risk Management and Decision Processes Centre; University of Pennsylvania October 2004.
[10] Robert P Hartwig “One Hundred Minutes of Terror that Changed the Global Insurance Industry Forever” Insurance Information Institute September 11, 001:The First Year.
[11] Howard Kunreuther and Erwann Michel-Kerjan “Terrorism Insurance 2005” Insurance Regulation Spring 2005 p 44-51.
[12] Insurance Information Institute News Release “9/11 and insurance, one year later: terror attacks most complex disaster in history” PR Newswire 6th September 2002, <www.prnewswire.co.uk/cgi/news/release?id=90342> viewed 21/8/07.
[13] Erwann Michel-Kerjan and Burkhard Pedell “Terrorism Risk Coverage in the post 9/11 Era: A Comparison of the New Public-Private Partnership in France, Germany and the U.S.” Wharton – Risk Management and Decision Processes Centre; University of Pennsylvania October 2004.
[14] Ibid.
[15] Robert P Hartwig “One Hundred Minutes of Terror that Changed the Global Insurance Industry Forever” Insurance Information Institute September 11, 2001: The First Year.
[16] Ibid.
[17] Ibid.
[18] “Ownership, control and “Insurance of the World Trade Centre” 9-11 Research <www.911research.wtc7.net/wtc/background/owners/hmtl viewed 21/8/07>
[19] Ibid.
[20] Ibid.
[21] Warrington J.M. “9/11 WTC Insurance litigation- Phase 2 and 3” Insurance Law Journal Vol 16. June 2005
<www.lexis.com/research/retrieve?_m=781ef668d482a4f4566f4fd3943f49964&docn> Viewed 4/11/07.
[22] Ibid.
[23] Ibid.
[24] Ibid.
[25] Ibid.
[26] Howard Kunreuther and Mark Pauly “What You Don’t Know Can Hurt You: Terrorism Losses and All Peril Insurances” Wharton School University of Pennsylvania December 2004.
[27] Robert P Hartwig “One Hundred Minutes of Terror that Changed the Global Insurance Industry Forever” Insurance Information Institute September 11, 2001: The First Year.
[28] Howard Kunreuther and Erwann Michel-Kerjan “Challenges for Terrorism Risk Insurance in the United States” Journal of Economic Perspective- Vol 18, Number 4 Fall 2004 pp201-214.
[29] Insurance Information Institute “Terrorism and Insurance” July 2004 <www.iii.org/media/hottopics/insurance/sept11/tria/?printerfriendly=yes> viewed 21/8/07.
Jonathon B. Smith “Terrorism Insurance” Whisper Wave Innovative Maritime Solutions <www.whisprwave.com/msu-hs-class/terrorism-insurance.htm viewed 21/8/07>.
[30] Dr Gordon Woo “A Terrorism Risk Analyst’s perspective on TRIA”.
[31] Jonathon B. Smith “Terrorism Insurance” Whisper Wave Innovative Maritime Solutions <www.whisprwave.com/msu-hs-class/terrorism-insurance.htm viewed 21/8/07>.
[32] Sophie Korczyk “Insuring the Uninsurable: Private Insurance Markets and Government Intervention in Cases of Extreme Risk” NAMIC Issue Analysis June 2005.
[33] Robert P Hartwig “One Hundred Minutes of Terror that Changed the Global Insurance Industry Forever” Insurance Information Institute September 11, 2001: The First Year.
[34] Ibid.
[35] Ibid.
[36] Ibid.
[37] Insurance Information Institute “Terrorism Risk and Insurance” August 2007 <www.iii.org/media/hottopics/insurance/terrorism/?printerfriendly=yes>.
[38] Ibid.
[39] Ibid.
[40] “Insuring Against Terrorism” IBIS World USA Newsletter July 2005 <www.ibisworld.com/newsletter/issues/us/05jul/news.htm>.
[41] Insurance Information Institute “Terrorism Risk and Insurance” August 2007 <www.iii.org/media/hottopics/insurance/terrorism/?printerfriendly=yes>
[42] Ibid.
[43] Ibid.
[44] Ibid.
[45] Ibid.
[46] Ibid.
[47] Ibid.
[48] Howard Kunreuther and Erwann Michel-Kerjan “Terrorism Insurance 2005” Insurance Regulation Spring 2005 p 44-51.
[49] Insurance Information Institute “Terrorism Risk and Insurance” August 2007 <www.iii.org/media/hottopics/insurance/terrorism/?printerfriendly=yes>.
[50] Ibid.
[51] Ibid.
[52] Howard Kunreuther and Erwann Michel-Kerjan “Terrorism Insurance 2005” Insurance Regulation Spring 2005 p 44-51.
[53] Insurance Information Institute “Terrorism Risk and Insurance” August 2007 <www.iii.org/media/hottopics/insurance/terrorism/?printerfriendly=yes>.
[54] Ibid.
[55] Howard Kunreuther and Erwann Michel-Kerjan “Terrorism Insurance 2005” Insurance Regulation Spring 2005 p 44-51.
[56] Insurance Information Institute “Terrorism Risk and Insurance” August 2007 <www.iii.org/media/hottopics/insurance/terrorism/?printerfriendly=yes>.
[57] Ibid.
[58] Ibid.
[59] Ibid.
[60] Richard Allyn “The Fall and Rise of Terrorism Insurance coverage Since September 11, 2001” William Mitchell Law Review March 2003 <www.rkmc.com> Viewed 21/8/07.
[61] Litan Robert E. “Sharing and Reducing the Financial Risk of Future Mega-Catastrophes” The Brookings Institute Issues Economic Policy Number 4 March 2006.
[62] Ibid.
[63] Workshop by the Wharton Risk management and Decision Process Centre “TRIA and Beyond: What would be the most effective way for the Nation to recover from (Mega) Terrorist Attacks” Feb 2005.
[64] Ibid.
[65] Howard Kunreuther and Mark Pauly “What You Don’t Know Can Hurt You: Terrorism Losses and All Peril Insurances” Wharton School University of Pennsylvania December 2004.
[66] Ibid.
[67] Ibid.
[68] Ibid.
[69] Sophie Korczyk “Insuring the Uninsurable: Private Insurance Markets and Government Intervention in Cases of Extreme Risk” NAMIC Issue Analysis June 2005.
[70] Aon Crisis Management “Stand-Alone Terrorism Insurance Market Update” March 2006.
[71] Insurance Information Institute “Terrorism and Insurance” July 2004 <www.iii.org/media/hottopics/insurance/sept11/tria/?printerfriendly=yes> viewed 21/8/07.
[72] Ibid.
[73] Ibid.
[74] Ibid.
[75] Ibid.
[76] Richard Allyn “ The Fall and Rise of Terrorism Insurance coverage Since September 11, 2001” William Mitchell Law Review March 2003 <www.rkmc.com> Viewed 21/8/07.
[77] Ibid.
[78] Ibid.
[79] Sophie Korczyk “Insuring the Uninsurable: Private Insurance Markets and Government Intervention in Cases of Extreme Risk” NAMIC Issue Analysis June 2005.
[80] Workshop by the Wharton Risk management and Decision Process Centre “TRIA and Beyond: What would be the most effective way for the Nation to recover from (Mega) Terrorist Attacks” Feb 2005.
[81] Howard Kunreuther and Erwann Michel-Kerjan “Challenges for Terrorism Risk Insurance in the United States” Journal of Economic Perspective Vol 18, Number 4 Fall 2004 pp201-214.
[82] Ibid.
[83] Ibid.
[84] Ibid.
[85] Ibid.
[86] Ibid.
[87] AON Risk Services “Terrorism Risk Management and Risk Transfer Market Overview” December 2004.
[88] Ibid.
[89] Workshop by the Wharton Risk management and Decision Process Centre “TRIA and Beyond: What would be the most effective way for the Nation to recover from (Mega)- Terrorist Attacks” Feb 2005.
[90] Ibid.
[91] Ibid.
[92] Erwann Michel-Kerjan and Burkhard Pedell “Terrorism Risk Coverage in the post 9/11 Era: A Comparison of the New Public-Private Partnership in France, Germany and the U.S.” Wharton – Risk Management and Decision Processes Centre; University of Pennsylvania October 2004.
[93] Ibid.
[94] Howard Kunreuther and Erwann Michel-Kerjan “Challenges for Terrorism Risk Insurance in the United States” Journal of Economic Perspective Vol 18, Number 4 Fall 2004 pp201-214.
[95] Ibid.
[96] Debra J. Roberts “TRIA: Where do we go from here” The Centre on Federal Financial Institution 2005.
[97] Insurance Information Institute “Terrorism and Insurance” July 2004 <www.iii.org/media/hottopics/insurance/sept11/tria/?printerfriendly=yes> viewed 21/8/07.
[98] Richard J Hillman “Terrorism Insurance – Effects of the Terrorism Risk Insurance Act of 2002” United States General Accounting Office Testimony Before the Committee on Banking, Housing and Urban Affairs, United States Senate 18th May 2004.
[99] The Terrorism Insurance Act 2003.
[100] Peter Costello “Terrorism Insurance” Commonwealth of Australia Treasury Department Media Release <www.treasurer.gov.au> viewed 21/8/07.
[101] Peter Costello “Terrorism Insurance” Commonwealth of Australia Treasury Department Media Release <www.treasurer.gov.au> viewed 21/8/07.
[102]“ Insurance Council Supports Terrorism Insurance Act Review” Media Release Insurance Council 15/9/06 <www.insurancecouncil.com.au> viewed 21/8/07.
[103] Terrorism Insurance Act Review: 2006 - Encouraging commercial involvement The Australian Government Treasury <www.treasury.gov.au> viewed 21/8/07.
[104] Insurance Information Institute “Terrorism Risk and Insurance” August 2007 <www.iii.org/media/hottopics/insurance/terrorism/?printerfriendly=yes>.
[105] AON Risk Services “Terrorism Risk Management and Risk Transfer Market Overview” December 2004.
[106] Robert P Hartwig “One Hundred Minutes of Terror that Changed the Global Insurance Industry Forever” Insurance Information Institute September 11, 2001: The First Year.
[107] Erwann Michel-Kerjan and Burkhard Pedell “Terrorism Risk Coverage in the post 9/11 Era: A Comparison of the New Public-Private Partnership in France, Germany and the U.S.” Wharton – Risk Management and Decision Processes Centre; University of Pennsylvania October 2004.
[108] Robert P Hartwig “One Hundred Minutes of Terror that Changed the Global Insurance Industry Forever” Insurance Information Institute September 11, 2001: The First Year.
[109] Erwann Michel-Kerjan and Burkhard Pedell “Terrorism Risk Coverage in the post 9/11 Era: A Comparison of the New Public-Private Partnership in France, Germany and the U.S.” Wharton – Risk Management and Decision Processes Centre; University of Pennsylvania October 2004.
[110] Insurance Information Institute “Terrorism Risk and Insurance” August 2007 <www.iii.org/media/hottopics/insurance/terrorism/?printerfriendly=yes>.
[111] AON Risk Services “Terrorism Risk Management and Risk Transfer Market Overview” December 2004.
[112] Robert P Hartwig “One Hundred Minutes of Terror that Changed the Global Insurance Industry Forever” Insurance Information Institute September 11, 2001: The First Year.
[113] Erwann Michel-Kerjan and Burkhard Pedell “Terrorism Risk Coverage in the post 9/11 Era: A Comparison of the New Public-Private Partnership in France, Germany and the U.S.” Wharton – Risk Management and Decision Processes Centre; University of Pennsylvania October 2004.
[114] Insurance Information Institute “Terrorism Risk and Insurance” August 2007 <www.iii.org/media/hottopics/insurance/terrorism/?printerfriendly=yes>.
[115] AON Risk Services “Terrorism Risk Management and Risk Transfer Market Overview” December 2004.
[116] Robert P Hartwig “One Hundred Minutes of Terror that Changed the Global Insurance Industry Forever” Insurance Information Institute September 11, 2001: The First Year.
[117] Erwann Michel-Kerjan and Burkhard Pedell “Terrorism Risk Coverage in the post 9/11 Era: A Comparison of the New Public-Private Partnership in France, Germany and the U.S.” Wharton – Risk Management and Decision Processes Centre; University of Pennsylvania October 2004.
[118] Robert P Hartwig “One Hundred Minutes of Terror that Changed the Global Insurance Industry Forever” Insurance Information Institute September 11, 2001: The First Year.
[119] Ibid.
[120] Insurance Information Institute “Terrorism Risk and Insurance” August 2007 <www.iii.org/media/hottopics/insurance/terrorism/?printerfriendly=yes>
[121] Robert P Hartwig “One Hundred Minutes of Terror that Changed the Global Insurance Industry Forever” Insurance Information Institute September 11, 2001: The First Year.
[122] Insurance Information Institute “Terrorism Risk and Insurance” August 2007 <www.iii.org/media/hottopics/insurance/terrorism/?printerfriendly=yes>
[123] AON Risk Services “Terrorism Risk Management and Risk Transfer Market Overview” December 2004.
[124] CBS News “Life Insurance, For the Olympics” CBS NEWS London, April 27, 2004 <www.cbsnews/stories/2004/05/05/world/printable615609.shtml viewed 21/8/07>.
[125] “IOC Gets Cancellation Insurance for Olympic Games” <www.Gamesbid.com> viewed 21/8/07.
[126] Ibid.
[127] Axon Group “Olympic Games Carrier”
>www.findarticles.com/p/articles/mi_m0Bjk/is_14_16/ai+nl5794177/print Viewed 21/8/07>.
[128] “First Insurance Policies for Beijing @008 Olympics Games Volunteers underwritten” Official Website for the 2008 Beijing Games <http://en.beijing2008.com> viewed 21/8/07.
[129] Al Modugno “Marsh Selected to Provide Insurance and Risk Services for 2008 Summer Olympics in Beijing” Press Release Marsh.
<www.global.marsh.com/news/press/pr20051006.php viewed 21/8/07>.
[130] Zhan Yan “Olympic Security on Track” March 25 2007 <www.boloji.com> Viewed 21/8/07.
[131] Elliot Blair Smith “Terrorism insurance gap looms for USA” USA Today 12/7/05 <www.usatoday.printthis.clickability.com/pt/cpt?action=cpt&title>.
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