September 11, 2001 attacks

On September 11, 2001, four hijacked planes struck the two World Trade Center towers and the Pentagon, the fourth crashing at Shanksville. Nearly 3,000 people died. The insured cost, estimated at around 40 billion dollars at the time, was then the largest loss in insurance history, and it held that place until Katrina in 2005. What sets it apart is less the amount than the spread: property damage, business interruption, including from civil authority orders barring access, aviation hull and liability, workers' compensation, life, general liability, event cancellation. Accumulation models reasoned line by line; September 11 showed that a single act hits every line of a group and all its reinsurers at once. Insurers did not invoke the war exclusion, even though President Bush spoke of an act of war: the market took the view that a non-state organization does not wage war in the policy sense. The reaction came at renewal. Reinsurers excluded terrorism from treaties at the January 1, 2002 renewals, insurers filed exclusions in their policies, and aviation insurers canceled third-party war liability on seven days' notice, before governments temporarily took it over. Congress passed TRIA, signed into law in November 2002, and several European markets had already set up their own schemes, GAREAT in France, operating since January 1, 2002, and Extremus in Germany, founded the same year.