The ongoing WTC trial is unlikely to have an impact on insurer ratings, said Standard & Poor's, even if a verdict is given in favour of Larry Silverstein.

Under the worse-case scenario for the insurers, a verdict in favour of the Silverstein interests would result in a doubling of the original policy limits of $3.55 billion," said, Standard & Poor's Insurance Ratings Services managing director Steven Dreyer.

"Although the amount is obviously significant, the loss is well spread across the insurance industry. Silverstein's insurance program consisted of a primary and 11 excess layers in which more than 20 insurers and Lloyd's syndicates participated.

"The largest participant was Swiss Reinsurance, with a share of about 25%. Therefore, a verdict against the insurers is not, in itself, a trigger for further downgrades."

Whether the attack on the WTC is deemed to be one event or two events, it will be a relatively small part of the overall liability picture spawned by September 11, said Standard & Poor's.

It said unresolved business-interruption claims against insurers exceeded $8 billion at mid-year 2003, according to PricewaterhouseCoopers. In addition, a large property claim involving Deutsche Bank is still partly at issue.

Only 70 families retained the ability to seek compensation from insurers, having refused to receive money from a federal victims' compensation fund. Standard & Poor's said it saw the limited number of families eligible for such compensation as a positive for the insurance industry.

"Although the payouts from the WTC attack are significant, the insurance industry has learned how to employ better modelling techniques and to spread risk more efficiently," concluded Dreyer. "This case proves that point."

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