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September 13, 2004
Joseph R. Lebens, FCAS, MAAA
©Towers Perrin
WTC – Three Years Later
CARe Special Interest Seminar
2©Towers Perrin
Initial estimates of insured lossesfrom 9/11 ranged from $30B to over $70B
- 10 20 30 40 50 60 70 80
NYC Comptroller
Munich Re
Morgan Stanley
Milliman
Fitch
Dowling Partners
AIG
I. I. I.
NAII
Tillinghast
Insured Losses ($Billions)
3©Towers Perrin
Generally speaking,the early estimates appear to be conservative
- 10 20 30 40 50 60 70 80
NYC Comptroller
Munich Re
Morgan Stanley
Milliman
Fitch
Dowling Partners
AIG
I. I. I.
NAII
Tillinghast
Insured Losses ($Billions)
Current estimate is $30 - $35B1
1 Source: Insurance Information Institute
4©Towers Perrin
Early estimates appear to be too high partlydue to a misread of the amount of liability claims
Victim Compensation Fund Over 98% of eligible families submitted claims The average deceased victims award after offsets
was approximately $2.1m
Difficultly in quantifying Business Interruption claims
Available information immediately following 9/11 proved to be inaccurate Number of injuries Number of deaths
Original estimates – 5,000 plus
Actual was approximately 2,800
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The north tower of theWTC was attacked first at 8:46 am
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Sixteen minutes later thesouth tower was also attacked
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For nearly an hour after the secondplane attacked, the two towers burned
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At 9:59 am, the south tower, thesecond one attacked, was the first to collapse
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Thirty minutes laterthe north tower also collapsed
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Nearly 2,800 people lost their lives
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8:30 9:00 9:30 10:00 10:30 11:00 11:308:30 9:00 9:30 10:00 10:30 11:00 11:30
Chronology of September 11
North tower hit at 8:46
South tower hit at 9:02
South tower collapses at 9:59
North tower collapses at 10:28
:16
:56
1:12
:29
1:41
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Impact zones of aircraft on September 11
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Virtually all workers/visitors at or above theimpact were killed; most of those below survived
North Tower
South Tower
84th 78th
98th 93rd
1,360 deaths
72 deaths
595 deaths
4 deaths
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There were a number of mitigating factors
The building had been attacked before; evacuation procedures were better known
The attack occurred before many had arrived at work
The emergency stairwells were wider than required by code
The buildings remained standing for over an hour
Most people in the south tower began evacuating shortly after the north tower was attacked and before the south tower was attacked
New York Workers Compensation benefits are lower than other states
15©Towers Perrin
The workers compensation gross losses were approximately $1.8 billion, $0.9B net
Initial estimates pegged the workers compensation losses at $3 - $5 billion
The number of deaths was approximately ½ of the that which was initially estimated
Approximately 480 (15%) of the deaths were self-insured NYFD NYPD
Approximately 600 of the deaths involved single individuals (lump-sum $50,000 payment per person)
Some of the deaths were not eligible for workers compensation (e. g., visitors to the towers)