Eight years after the terrorist attacks of 9/11 caused untold human tragedy and shocked the underwriting world, insurers are seeing a much calmer environment, an industry expert said.

“The insurance markets have stabilized, not only because there hasn’t been an event, but because we now have a long-term insurance backstop in place,” noted Insurance Information President Robert Hartwig, referring to the government supports in the Terrorism Risk Insurance Act (TRIA).

In the aftermath of the attacks, workers’ compensation costs soared for firms with a concentration of risk, so-called potential terrorist “trophy” buildings were hard to insure and aviation markets were hit hard, among other segments that were impacted, he noted.

For comp cover “after 9/11 prices were increasing 15 to 20 percent and even more in New York’s midtown and other urban centers, Mr. Hartwig recalled.

He pointed out that TRIA was not in place until 14 months after the catastrophe, and “capacity was already shrinking after a poor investment market. There was simply less capacity in the system.”

Now, he said, insurers know that with the government backstop their losses will ultimately be capped, “But what has not changed is there remains little appetite for standalone terrorism coverage.”

There was capacity back in 2001 and “that remains the case today, and there is no reason to expect that to change in the future,” Mr. Hartwig predicted.

However, trophy buildings in today’s environment have no problem finding property coverage and insurance is available for the Empire State Building, stadiums, airports and other potential targets.

“The private sector is satisfying the demand,” he said.

TRIA is now extended for seven years, and there was a surge in capacity beginning in 2004 through 2007, which sparked a significant amount of competition. “There’s been a healthy appetite for insuring most types of risks that have some component of terrorism exposure,” Mr. Hartwig related.

According to I.I.I. data, the 9/11 attack produced insured losses of $39.5 billion (adjusted to 2008 dollars). In percentage terms, the I.I.I. said the largest loss cost was for business interruption, $13.1 billion or 33 percent.

Some 45,000 persons filed workers’ compensation claims from injuries at the World Trade Center site or affidavits of work at the site after it was hit by the terrorists- including victims of the attacks and people who performed rescue, recovery and clean-up work, according to the New York State Workers’ Compensation Board's latest figures.

The Board said its  files indicate approximately 37,000 people have either opened workers’ compensation cases for injuries and illness suffered during rescue, recovery and clean-up work, or filed a statement advising they participated in those activities, preserving their right to future benefits.

Uniformed members of the New York City Police, Fire and Sanitation Departments and federal employees, are not part of the state system, so are not included in the totals.

The 2001 catastrophe “was the largest loss in the history of insurance until Hurricane Katrina in 2005 when insurers paid claims totaling more than $40 billion to help people along the Gulf coast rebuild their homes and businesses,” said Mr. Hartwig,

“Insurance claim dollars are playing an essential role in rebuilding lower Manhattan,” he noted.

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