As the dust settles in Lower Manhattan, it is still difficult to understand the impact of the
terrorist attacks on New York and Washington.

Our hearts go out to everyone who has lost friends, relatives and colleagues in the tragedy and we have dedicated the centre section of the magazine to messages of sympathy from the industry.

As well as the human cost, there will be a considerable financial cost. The insurance industry is at the forefront of efforts to put people's lives back in order and that is something to be proud of. But there will be a bitter pill to swallow. Experts estimate claims resulting from the disaster will be the biggest ever, at £20bn to 50bn. The biggest claim so far was Hurricane Andrew in 1992, which brought Lloyd's to its knees.

It cost £12m. This time around, Lloyd's has a reinsured central fund to prop up ailing syndicates. The fund may become exhausted and some syndicates will fail, but Lloyd's will survive.

Reinsurers are already reeling from the losses they expect to incur. It is expected rates will rise by as much as 40% across the board. And so insurers will have to pass on the costs. Already airline insurance rates have increased 1000%, according to market sources.

Brokers are at the sharp end. There will be limited capacity for insurance and rates will be sky-high. Already brokers were looking at alternative risk transfer methods as a way of tackling a capacity crisis. Now alternative risk transfer specialists will be at the top of everyone's shopping list.