Insurers Need To Take Steps
Against Terrorist Risks: LOMA
Life and health insurers face the distinct possibility of financial disaster if there are widespread terrorist attacks, warns a new study from LOMA, Atlanta.
And whether insurers realize it or not, they are underwriting these risks, says Steven Forbes, author of the LOMA report, “The New World of Risk.”
“There are no exclusions in life insurance contracts for nuclear or biological events, so they are underwriting them,” Forbes notes in an interview with National Underwriter.
LOMAs study also points to a number of more conventional threats for the industry, including hacker attacks on computer systems and escalating tort litigation. But it is the terrorist threats that lie outside the life insurance industrys normal frame of reference, and for which LOMA warns many in the business may be unprepared.
The 9-11 attacks took about 3,000 lives. That was horrific in human terms but one that the life and health insurance industry was able to absorb with relatively little trouble.
However, LOMAs report points to some potential terrorism scenarios involving the loss of perhaps hundreds of thousands of lives plus numerous serious injuries. That would be an overwhelming economic and financial disaster for all industries, including insurance.