JERSEY CITY, N.J., Jan. 13, 2005 — ISO's Property Claim Services (PCS) unit has expanded its services to include loss estimates for potential catastrophic terrorism losses. PCS today announced it will assign catastrophe serial numbers to potential terrorism events likely to have caused at least $5 million in insured losses anywhere in the U.S., Puerto Rico and the U.S. Virgin islands.
PCS selected a $5 million threshold for potential terrorism catastrophes to coincide with the amount specified by the federal Terrorism Risk Insurance Act (TRIA). "Historically, PCS defines a catastrophe as an event causing more than $25 million in losses and affecting a significant number of insurers and policyholders," said Gary Kerney, assistant vice president in charge of PCS. "To support the U.S. Treasury Department with insured loss data, we are using the lower monetary threshold to designate catastrophic losses for events that may be caused by terrorists," said Kerney.
The Treasury Department is charged with defining "certified acts" of terrorism under TRIA.
The ISO unit's estimates of claims for potential terrorism acts will include losses for personal and commercial lines (including workers' compensation), but the losses will be separately identified.
ISO's claims services unit also said it will begin assigning serial numbers to catastrophic workers' compensation losses. "When appropriate, PCS will assign catastrophe serial numbers to extreme events involving only workers' compensation claims, whatever the cause," Kerney said.
"Our decision to broaden PCS services is a response to two growing uncertainties in the property/casualty insurance market — terrorism and outsized workers' compensation loss. We expanded our services to help insurers and reinsurers make sound decisions when developing and activating reinsurance coverage agreements and in planning strategically to deal with these two great threats," said Kerney.