Terrorist attacks cause major shift in the United States
Thirteen years ago, the United States was rocked by a devastating terrorist attack that will live forever in infamy. September 11, 2001, will long be remembered as a day of mourning and serves as a constant reminder of the unpredictability of catastrophic events. The event on 9/11 has changed the U.S. and continues to spur shifts within the insurance industry and the government. Every year, it is important to look back on the event and take note of how much has actually changed.
The loss of human life on 9/11 is an uncomfortable subject for many people. Thousands were personally impacted by the catastrophe directly and millions felt the resounding effects of the attacks throughout the country. For the insurance industry, losses were primarily seen in a financial light, though many people working in the industry lost their loved ones as a result of the attacks.
$3.3 trillion worth of damage caused by 9/11 attacks
All tolled, the cost of the 9/11 attacks is estimated to be approximately $3.3 trillion. While no amount of money can replace the lives lost in the disaster, the insurance industry has worked to recover from the attacks as much as it can. Loss of business, health care expenses, and a wide range of recovery efforts have been covered by insurers and some are still reeling from the financial losses that they sustained in the wake of the attacks.
Some insurance companies have taken legal action in order to recover their losses from 9/11. Lawsuits targeting the governments of foreign countries, seeking to hold political parties liable for the attacks in the U.S. Many of these lawsuits were unsuccessful, though some are still in the litigation process and have yet to see any definitive resolution.
Insurers continue to take lessons from the past
The insurance industry spent approximately $4.5 billion on covering the costs associated with cleaning up the remnants of the World Trade Center buildings, as covering the costs of damaged buildings surrounding the site of the attack. Those working in the rubble were later struck with serious health issues that have been an ongoing problem for insurance companies, with some insurers arguing that they are not liable for covering the medical care that these workers need.
As with any major catastrophe, mistakes were made in handling the impact of 9/11. Insurance companies often pride themselves on their ability to mitigate risks relating to unpredictable disasters, but when these disasters happen, there is always a degree of human error. In the years that followed 9/11, the way the insurance industry handled the risk of terrorism changed. In 2002, the Terrorism Risk Insurance Act was passed, which provided a backstop for claims that are associated with terrorist attacks. This provided some financial security for both insurers and potential victims.
The future will always be unpredictable, but the insurance industry has learned much from 9/11 that will not soon be forgotten. These lessons will continue to shape the industry, as the memory of that day continues to affect the course of the future.