Federal Terrorism Risk Insurance

21 Pages Posted: 11 Oct 2002 Last revised: 27 Jan 2003

See all articles by Jeffrey R. Brown

Jeffrey R. Brown

University of Illinois at Urbana-Champaign - Department of Finance; National Bureau of Economic Research (NBER); University of Illinois College of Law; University of Illinois at Urbana-Champaign - Institute of Government and Public Affairs (IGPA); University of Illinois at Urbana-Champaign - Department of Economics

Randall Kroszner

University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER)

Brian H. Jenn

Yale University - Law School

Multiple version iconThere are 2 versions of this paper

Date Written: October 2002

Abstract

The terrorist attacks of September 11, 2001 represented a loss for commercial property & casualty insurers that was both unprecedented and unanticipated. After sustaining this record capital loss, the availability of adequate private insurance coverage against future terrorist attacks came into question. Concern over the potential adverse consequences of the lack of availability of insurance against terrorist incidents led to calls for federal intervention in insurance markets. This paper discusses the economic rationale for and against federal intervention in the market, and concludes that the benefits from establishing a temporary transition program, during which the private sector can build capacity and adapt to a dramatically changed environment for terrorism risk, may provide benefits to the economy that exceed the direct and indirect costs.

Suggested Citation

Brown, Jeffrey R. and Kroszner, Randall and Jenn, Brian H., Federal Terrorism Risk Insurance (October 2002). NBER Working Paper No. w9271, Available at SSRN: https://ssrn.com/abstract=338877

Jeffrey R. Brown (Contact Author)

University of Illinois at Urbana-Champaign - Department of Finance ( email )

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National Bureau of Economic Research (NBER) ( email )

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University of Illinois College of Law ( email )

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University of Illinois at Urbana-Champaign - Institute of Government and Public Affairs (IGPA) ( email )

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University of Illinois at Urbana-Champaign - Department of Economics ( email )

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Randall Kroszner

University of Chicago - Booth School of Business ( email )

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National Bureau of Economic Research (NBER)

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Cambridge, MA 02138
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Brian H. Jenn

Yale University - Law School ( email )

P.O. Box 208215
New Haven, CT 06520-8215
United States

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