FACT: The terrorist attacks of September 11, 2001 are often cited as “The Cause” of the last round of rate increases, but in fact, the insurance industry has survived similar losses before. Although this event — at the time the world’s largest insurance loss ever — did not help the insurance picture, those within the insurance industry understand that the market had already become more difficult and strained prior to the attacks. The 1998 ice storm is the largest and most expensive natural disaster in Canadian history and, although it was bigger as a share of the Canadian market than September 11 was relative to the size of the US insurance market, it had very little impact on the price consumers paid for insurance afterwards.
What the events of September 11 did do is change how the insurance industry looks at risk and the cost of risk.
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