September 19, 2001 by Canadian Underwriter
Citigroup has reported a loss estimate relating to the September 11 terrorist attacks of up to US$500 million after tax, equivalent to approximately 10c a share. Claims are expected from property, business interruption, workers’ compensation and life insurance. The company also expects a business loss of about US$100-200 million as the result of closure of branch offices last week, as well as the New York Stock Exchange. "No monetary costs can compare with the human tragedy that our country experienced last week. However, as we begin to assess the damage incurred and the ensuing costs, we felt it important to give our shareholders an initial estimate of the financial impact on our company," says CEO Sanford Weill.
The Hartford Financial Services Group has posted a loss estimate from the attack on the World Trade Center (WTC) of US$450 million after tax. Roughly US$30 million of this amount arises from its life insurance operation. According to CEO Ramani Ayer, the insurer felt that the standard "act of war" exclusion in covers did not fit the events which unfolded on September 11. The Hartford has begun payment of claims in advance, he adds.
The Chubb Corporation has also determined that the "acts of war" exclusion does not apply to last week Tuesday’s events, says CEO Dean O’Hare. The insurer has begun paying claims relating to the terrorist attacks.