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Subject:  Re: modeling terrorism risk Date:  4/24/2002  7:14 AM
Author:  peterxyz Number:  203 of 297

"Is $40 billion the actual physical damage plus some allowance for the people who were killed and the direct lost work time for those displaced by the attacks? Does it at all take into account the fact that no one I know was particularly productive for the week following? Indeed, should it?"

If you're talking about the WTC loss figure of $40b then you're almost certainly referring to an insurance figure. If that is the case, then the figure represents the lower end of the top-down estimates (as opposed to the sum of individual company's estimates which is much lower) for the bill to insurance companies.

This would include;
- litigation and claims adjustment costs
- $5-10 billion in liability claims (this is where a lot of the variability in the $30-70b figures comes from)
- business interruption insurance coverage paid

and wouldn't include
- business interruption which isn't insurred

re the article - I read it a couple of days ago and was struck by the good explaination of the two-goat puzzle and how the two different answers could be arrived at (first sidebar in the article)

peter xyz
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