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Investing in Insurance of Air Transport

Investing in Insurance of Air Transport I. INTRODUCTION Following the events of 11 September 2001, in which civil aircraft were used as weapons of destruction, aviation insurers gave seven days' notice on 17 September that war risk third party liability coverage according to policy terms applying to the write- back coverage for war, hijacking and other perils would be withdrawn. The most compelling reason for the cancellations was the emergence of an exposure in terms of third party bodily injury and property damage that was unquantifiable. The International Union of Aviation Underwriters has assessed that the total losses in respect of third party bodily injury and property damage caused by these events could exceed the previous greatest single catastrophic loss of US$ 20 billion caused by Hurricane Andrew in 1992 by a significant margin.1 1 Coverage provided by airline insurance policies regarding perils other than third party liability for war risks have not been affected by this cancellation. War and allied perils coverage with regard to passengers have been left unchanged, but the uncertainty created by the events have made it essential to circumscribe coverage for third party losses at a maximum of US$ 50 million. Although premiums were already increasing due to a http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of World Investment and Trade Brill

Investing in Insurance of Air Transport

Journal of World Investment and Trade , Volume 3 (3): 13 – Jan 1, 2002

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Publisher
Brill
Copyright
Copyright © Koninklijke Brill NV, Leiden, The Netherlands
ISSN
1660-7112
eISSN
2211-9000
DOI
10.1163/221190002X00067
Publisher site
See Article on Publisher Site

Abstract

I. INTRODUCTION Following the events of 11 September 2001, in which civil aircraft were used as weapons of destruction, aviation insurers gave seven days' notice on 17 September that war risk third party liability coverage according to policy terms applying to the write- back coverage for war, hijacking and other perils would be withdrawn. The most compelling reason for the cancellations was the emergence of an exposure in terms of third party bodily injury and property damage that was unquantifiable. The International Union of Aviation Underwriters has assessed that the total losses in respect of third party bodily injury and property damage caused by these events could exceed the previous greatest single catastrophic loss of US$ 20 billion caused by Hurricane Andrew in 1992 by a significant margin.1 1 Coverage provided by airline insurance policies regarding perils other than third party liability for war risks have not been affected by this cancellation. War and allied perils coverage with regard to passengers have been left unchanged, but the uncertainty created by the events have made it essential to circumscribe coverage for third party losses at a maximum of US$ 50 million. Although premiums were already increasing due to a

Journal

Journal of World Investment and TradeBrill

Published: Jan 1, 2002

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