Insurance industry better able to provide terrorism coverage: Greenberg
Posted On: Feb. 21, 2013 12:00 AM CST
WASHINGTON — The private insurance market is far better positioned to provide terrorism coverage than it was when the federal terrorism insurance backstop was created in 2002, according to Maurice R. Greenberg.
“I think right now, the private market is capable of doing a heck of a lot more” in the area than was the case when the Terrorism Risk Insurance Act of 2002 became law, said Mr. Greenberg, who is chairman and CEO of C.V. Starr & Co.
“I'd like to see the private sector do whatever it can,” said Mr. Greenberg during a press conference Thursday at the National Press Club in Washington.
He noted that Starr underwrites terrorism coverage.
Mr. Greenberg stopped short, however, of calling for an end to the federal terrorism insurance backstop, which is slated to expire on Dec. 31, 2014.
“I wouldn't let the program expire without talking to the industry as a whole,” he said, noting that while Starr provides such coverage, it has limited capacity.
A bill that would extend the program through Dec. 31, 2019, was introduced in the House of Representatives this month.
Mr. Greenberg, the former CEO of American International Group Inc., also discussed the fall of AIG in 2008, several years after he left the company.
“We understood how to manage AIG Financial Products,” he said, referring to the unit blamed for the company's near-collapse and subsequent bailout by the federal government.
“We had an enterprise risk management structure” before ERM was conceived, he said.