Consider the following:

• Financial conditions of the industry – The capital and surplus of the industry were roughly 300 billion at September 11, 2001, about twice that of 10 years ago.
  
  
• The Property Claims estimate changes daily but is being conservatively estimated at $70 Billion for all claims related to the 9-11 disaster. UIC clients have over $200 Million of claims directly.
  
  
• To date, various rating agencies, AM Best, Standard and Poor’s, Moody’s and Fitch are all cautiously confident that all claims will be met and little or no insolvency will occur.
  
  
• The NIAC (National Association of Insurance Commissioners) has formed a Financial Analysis working group to monitor and identify potential problems as the depth of the losses are revealed.
  
  
• The NAIC has also commissioned Arthur Anderson to carry out a Solvency Audit of Lloyds.
  
  
• Lloyds of London – Lloyd’s has traditionally been one of the world’s major reinsurance markets. Further, Lloyds is also the world’s premier aviation insurance market. In both capacities, Lloyds was particularly and disproportionately affected by the events of 9-11. Lloyds is a difficult market for most to understand. I have included a “Briefing Note” issued to Lloyds’ Brokers as respects their position post 9-11. It is well written and an excellent primer for one to understand how Lloyds for the most part operates. To conclude, at present Lloyds is shaken, but is predicted to survive and likely prosper given the recent dramatic rise in rates, both in reinsurance and retail insurance offerings.
  

The capital markets are already responding to the higher premiums being exhibited by the insurance industry. There are currently two new facilities being formed in Bermuda with approximately Four Billion in capital. We presume more influx of capital will come with the net effect hopefully shortening the duration of these radical increases as the insurers begin to chase (compete) for the better insureds.

UIC will be monitoring this progress and take advantage of same when and if available and appropriate.

In summary, although the industry seems well capitalized to withstand the disaster, it is individual insurers, which must respond to each individual insured. (Due Diligence is critical when selecting or considering any insurer to transfer your exposures to.)