The massive insurance bill for the carnage wreaked by the attacks on the World Trade Center took on greater definition Wednesday, though some questions about coverage remain.
Some of the world's largest reinsurers--those who insure the primary carriers against catastrophic claims--released estimates on the hits they expected to take, and they are big.
Estimates for the overall bill to insurance and reinsurance firms continued to grow, with one estimate by Moody's credit rating agency putting the tab at $10 billion to $15 billion, by far the biggest insurance bill for a man-made disaster in history.
"Nobody at this point can really give you a firm estimate. Anything at this point is guesswork," said Candysse Miller, spokeswoman for the Insurance Information Institute.
Still, numbers spilled forth. And so did questions about how many insurance contracts may contain exclusions for acts of terrorism, particularly because the World Trade Center was the target of an attack in 1993, and whether insurers would seek exclusion from liability under acts of war provisions if President Bush asks Congress to grant him powers of war.
Some observers think the second scenario is unlikely. "With war exclusions, we're talking about a declared war between two nations," said Sean McManamy, spokesman for the American Insurance Institute. "At this point, this is an act of terrorism, and it's likely that's how insurers will be viewing it."
Still, "it's going to be messy," said David Klevatt, a Chicago-based insurance attorney.
One of the first reinsurers to issue an estimate was Germany's Munich Re, putting its liabilities at up to $903 million. The hit will severely hurt profits, the company said. Swiss Re, of Switzerland, expects to cover $730 million in losses, and said it would survive the fallout from the attacks. And Zurich Financial Services estimated its pretax losses would be less than $400 million.
Other major reinsurers, such as GeneralCologne Re, a unit of Berkshire Hathaway Inc., are still analyzing their liabilities, as is Lloyd's of London, an insurance market made up of more than 100 businesses.
"It's too early to make estimates. We don't want to add to speculations," said Christian Lawrence, a spokesman for GeneralCologne Re, in Stamford, Conn.
The reinsurance firms estimates were "sizable, to say the least," noted Travis Pascavis, stock analyst with Morningstar Inc. in Chicago.
"I don't see any alarms going off, but in the next six months their earnings will take sizable hits," Pascavis said.
Weiss Ratings Inc., which rates insurance companies, said the disaster's impact on the property insurance industry is likely to be modest.
But insurers with worker's compensation or business-interruption exposure face greater risk, the company said, because there is no limit to the amount of claims they might incur.
A number of Illinois-based insurance companies were still assessing whether they would be hit with claims from the disaster.
State Farm Insurance, based in Bloomington, was still waiting to be able to do on-the-scene evaluations. It expects it may have claims from small-business, auto and life insurance policies.
Northbrook-based Allstate Insurance Co., which expects to see auto and life insurance claims eventually, had no estimate yet on potential liability but expected it to be minimal.