Property claims for 11 Sept to hit $20bn

The 11 September terrorist attacks on the United States will cost property insurers more than $20bn (£13.4bn), up 22 per cent from an earlier forecast, a leading insurance industry body has calculated.

Total property claims for the attacks on the World Trade Centre and the Pentagon will reach $20.3bn, the Insurance Services Office (ISO) said. That figure is up from the organisation's last estimate of $16.6bn, made shortly after the attack, as new claims have emerged.

ISO, which tallies losses from almost all US insurers, said its estimate was likely to change again as more claims trickle in.

But the insurance industry will probably pay out twice the $20bn in property losses, which includes business interruption insurance. Separate from that are liability insurance, workers compensation, aviation and life and health insurance losses. Including those, 11 September is expected to cost insurers and reinsurers worldwide about $40bn. "That makes the destruction of the World Trade Centre by far the costliest US catastrophe ever, surpassing insured losses from Hurricane Andrew in 1992, which cost insurers $19.6bn," the organisation said

ISO estimated that in New York there would be 49,000 claims – 30,000 personal, 15,000 commercial and 4,000 auto – while the attack on the Pentagon would produce a further 2,000 claims – 1,500 personal, 200 commercial and 300 auto.

A full counting of insured losses in the aftermath of the attack was delayed by rescue operations and lack of access to the areas of destruction by claims adjusters. Much uncertainty still surrounds property claims activity.

ISO estimates represent anticipated insured loss on an industry-wide basis, reflecting the total net insurance payment for personal and commercial property lines of insurance. The estimates exclude loss-adjustment expenses.