Books > After >

Excerpts

From After: How America Confronted The September 12 Era

Chubb Insurance Chairman and CEO Dean O'Hare -- fifty-nine, perpetually tanned, perfectly coiffed -- seemed like the country-club-groomed soul mate of the first President Bush. When O'Hare got the news of the attacks, he left the small airport in New Jersey where he was about to board the company jet for a trip to Pittsburgh and headed back to Chubb's headquarters in Warren, New Jersey, which is about forty miles west of Manhattan. His people were already at work doing computer models that projected potential Chubb losses, which included payouts to clients such as Cantor Fitzgerald, the Wall Street trading house where Eileen Simon's husband worked that would end up losing more than two thirds of its 1,000 American employees. After checking to make sure that none of Chubb's 12,000 employees had been hurt in Manhattan, O'Hare went to work with his team on the computer models. Because they always have information about policies at the ready organized by locations and industries, they calculated that Chubb's maximum exposure -- provided the insurance they have from reinsurers kicked in -- was $200 million. This included some insurance Chubb had sold to Silverstein's World Trade Center, but the bulk of what Chubb would have to pay involved clients ranging from people whose cars had been destroyed at the Trade Center, to those with companies whose businesses had now been interrupted, to large companies who paid Chubb for insurance to compensate workers killed or injured on the job. To reassure investors and the financial markets, that afternoon they put out a press release describing the projected losses.

But already the lawyers in O'Hare's conference room were raising a troubling issue. Because the President and others were calling this an act of war, and because acts of war were excluded from coverage on all insurance, what would Chubb do about the claims? More important, no matter what Chubb did, what would those reinsurers do? In other words, if Chubb wanted to pay the claims but its reinsurers -- some of whom were foreign companies -- took the position that they wouldn't, Chubb could be on the hook for more than a billion dollars. Maybe they should hold off on the payouts until things become clearer, the lawyers counseled.

We'll deal with that tomorrow, O'Hare decided.

Copyright © 2003 by Steven Brill