AIG launches terrorism insurance unit
With the extension of the Terrorism Risk Insurance Act still under discussion, AIG moves into a business its former chief threatened it would abandon
Late last year, we reported that the insurance industry had begun flooding Washington, D.C. with lobbyists in the hope of receiving an extension of the
Terrorism Risk Insurance Act (TRIA). The bill was passed soon after 9/11 and established the federal government as a financial backstop for extreme losses from a terrorist attack, and the insurance industry was threatening to pull out of the market entirely if some accomodation was not made. One of those leading the efforts was Maurice Greenberg, formerly of the American International Group (AIG). “The industry can handle the impact of another 9/11, what it can’t is the aftermath of a dirty bomb or a poisoned water supply in a major city,” Greenberg explained.
It is therefore quite interesting to note that his former company is not running away from the insurance business. In fact, AIG announced this week that the firm had created a specialty unit dedicated exclusively to selling insurance and other terrorism-related products, including emergency planning and threat assessments and crisis management services. “All companies are concerned about security, yet few have adopted a comprehensive, all-hazard approach to address terrorism risk,” said Robert Cruz, the newly-appointed chief of the AIG Homeland Security Solutions unit. (Cruz, we should note, is a Bronze Star winner from the war in Afghanistan and worked previously in AIG’s Emergency Readiness Program.) The new unit will be based in New York.
