September 13, 2004

Joseph R. Lebens, FCAS, MAAA

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WTC – Three Years Later

CARe Special Interest Seminar

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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)

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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

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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

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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)