Making The Case For Terror Re

To The Editor:

Regarding your Feb. 25 editorial, "Terrorism Reinsurance Debate Set To Heat Up On Capital Hill," there should be no debate. If the events of Sept. 11 had not been insured, the effects of the terrorist acts would have been more intensely painful and permanent.

Because of the lack of sufficient insurance, we are much more vulnerable to further attacks than we were in September. That vulnerability is already impeding economic activity. If similar attacks do occur under the present circumstances, they will be much more effective in damaging our spirits and shaking our confidence. That could have a truly disastrous effect, not only on business activity and on markets, but on our monetary system as well.

Military threats may grab the headlines, but the real response to terrorists is to demonstrate that the economic system we support has the financial resources and our politicians have the will to insure against any financial damage they can cause. An effective government reinsurance program is essential to this effort. To do anything less is to admit that the terrorists have been successful in their efforts to disrupt our lives.

Once such a backstop is in place, it will be up to insurers to make certain that terrorism insurance is broadly available at prices less than prohibitive. That will be a test of the will and the gumption of the private sector. Lets hope they can pass that test.

Charles A. McAlear
New Orleans, La.

Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, March 25, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.