"For the first time in our history, we had aviation risks correlating with fine arts floaters, correlating with business interruption losses, correlating with excess [workers'] comp accumulations."

For individual policies, Mr. Alfieri said, underwriters had done a good job. A review of every policy exposed to the Sept. 11 attacks showed that "while we wish we would have charged a little more, we didn't really make any bad underwriting decisions."

He noted that prior to Sept. 11, the reinsurance industry was experiencing a turnaround. But, Mr. Alfieri said, the effects of Sept 11 couldn't have come at a worse time, "because terms and conditions were the most flexible they have ever been."

In 2001, there were $12 billion in catastrophe losses, he said, noting that "by itself, without 9/11, it would have been in the top-five worst years in the insurance industry" from a catastrophe standpoint.

As for terrorism, he said that "as a reinsurer, we can exclude it overnight. From a policy-issuing standpoint, though, it takes a long time to get those exclusions approved," creating a gap in coverage for primary carriers and their clients.

After Sept. 11, "there was a significant time out because reinsurers didn't know what their capital base was to price business," he said. "Everything came to a screeching halt overnight. We were not allowed to quote business until we had some answers." Reinsurers didn't know if they could withstand another terrorist attack, he said.

Is there an increased insurance demand as a result of Sept. 11? "Absolutely," he said, adding that the risk management profession "is under an incredibly bright spotlight right now. Every one of our clients feels it." Problems in securing fronting carriers for captives, for example, are becoming "significant as we speak," he said.

As a result of Sept. 11, about 25 percent of global reinsurance capacity is gone, he said. "We're running out of adjectives to explain what's going to happen over the next 12-to-18 months," he added. A capital infusion of around $25 billion, including new Bermuda capacity and added capital from existing players, is "not enough" to offset Sept. 11 losses, he emphasized.

Describing the tumultuous climate of the current reinsurance market, Mr. Alfieri noted that in the movie "The Perfect Storm" there is a line ?We're running out of adjectives to explain this storm." At this point, he said, "we are running out of adjectives to explain what is happening from the reinsurance perspective."

"What are we telling clients? Go back to basics," Mr. Alfier said, noting that risk managers must remember the "300-29-1" rule. He explained that "for every major catastrophe or lost-time injury, there were 29 very small claims. For every 29 very small claims, there were 300 accidents for which there was no injury." Risk management programs, he said, must concentrate on preventing a recurrence of those 300 accidents that didn't result in a claim, as well as the 29 small incidents that did.

Guy Ragosta, managing director of Willis in Burlington, Vt., said he spends much of his time helping companies set up new captives and deciding on a domicile. Many new domiciles have been formed, but Mr. Ragosta said that, "unfortunately, they don't always have the infrastructure" to support the business.

One recently formed domicile, South Carolina, "seems to have taken the time and are investing in the infrastructure, so they might be a possibility," he said.