World
Trade Centre - Market News Update
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1 Oct 2001 USA:
Life industry confident of meeting hefty claims The large number of high net worth individuals that worked in the World Trade Center means life assurers will be paying out some hefty claims. The industry remains confident, nonetheless, that it can easily cover the costs and says it has already started paying. "There is the potential for several life insurance policies to get up to the $5m range, although it will be rare on a percentage basis. I would imagine that a third of individual claims will be valued at over $1m," said Timothy Clark, director of life insurance analysis at Standard & Poor's, the credit agency. The average individual claim is expected to be in the region of $300,000. However, the American Council of Life Insurers points out that many companies capped life insurance payouts at $50,000, to prevent employees from paying higher taxes. Whatever the costs, life assurers are confident they will easily cover claims related to the WTC incident. The claims estimated to be in the region of $3-$7bn and analysts appear convinced. Met-Life, which estimates its exposure at between $250m-$300m, said that so far it has received 170 claims and paid out $53m in insurance. New York Life, which anticipates its claims obligations to be about $100m, has received 45 reported deaths and puts the value of those claims at $13m, some of which it has already paid out. Axa Financial's Equitable Life required only that relatives of the victims show their loved one's name and social security number to receive an initial and immediate payout of $50,000, regardless of the policy. It declined to reveal how many claims it had received. (c) Copyright Financial Times Group. Source: FT.COM 01/10/2001 |
