9/11, A question of Insurance.

Having done a small web search, I realize that coming up with an
overall oddsmaker's figure for the events of 911 might be impossible.
I read three articles that indicate some of the difficulties involved.

Here are the links:

1. www.insurancenewsnet.com...

2. www.dailyherald.com...

3. www.gpmlaw.com...

Gleaning info from the three articles I found some interesting facts.
For one thing the estimated insurer's losses deriving from 911 come to
$32 billion dollars.(Link 2) Average payouts to families affected by
the tragedy amount to $1.8 million dollars.(Link 1) ABM Industry's
Inc., a firm that supplied engineering and janitorial services to the
WTC complex claimed losses for "business interruption" and other things
amounting to $100 million dollars. Their claim was denied at first,
then upheld on appeal.(Link 3)

These kind of claims illustrate how the total might reach $32 billion
dollars. They also indicate that there were hundreds of insurers
involved in one way or another, each assessing risk according to
different criteria. A life insurer for someone working at the WTC on
911 may have assessed terrorist risk differently than a property
insurer with paper written on the building.

The Terrorism Risk Insurance Act came into effect in November of 2002.
(Link 2) This is an interesting piece of legislation. It requires the
government to reimburse insurers up to $100 billion dollars if another
foreign originated terrorist assault occurs in the US before the end of
2007. (Link 2)

"The market has steadily grown since TRIA was enacted, according to a
study by Marsh & McLennan Companies Inc.’s risk and insurance services
subsidiary, Marsh Inc.
Nearly 60 percent of Marsh’s risk management and middle-market clients
bought terrorism insurance last year, up from 27 percent in 2003 and 50
percent in 2004. Coverage cost an average of 25 percent less in 2005
than in the previous year, the report found."(Link 2)

Another interesting quote form the same article: “There are no
accurate risk models,” said Joseph Annotti, spokesman for the Property
Casualty Insurers Association of America. “And I don’t know that there
ever will be, because there’s no way to predict what the next attack
will look like, where it will be centered, and what materials might be
used.”

What I get out of this is that the terror insurance business is
booming. An attack within the US is unlikely since the prime suspect
is willing to underwrite insurer's costs to the tune of $100 billion
dollars. Lastly, there doesn't seem to be any way that insurers can
calculate their risks. If they can't, nobody can. You could say that
the odds are incalculable. That's not same as astronomical, but I'm sure the odds of 911 happening were astronomical against until shortly
after 8:30 Am that day when they became dead certain.


To come up with the magic actuarial number you would have to know the
number for every affected insurance policy written then combine them
statistically to come up with the mother of them all. I'm not sure we can get that done in this forum.

Thats first class work, and a really good example of why this site works so well. Thanks.

Originally posted by ipsedixit

The Terrorism Risk Insurance Act came into effect in November of 2002.
(Link 2) This is an interesting piece of legislation. It requires the
government to reimburse insurers up to $100 billion dollars if another
foreign originated terrorist assault occurs in the US before the end of
2007. (Link 2)

Now thats really intersting isn't it. Looks like the US is safe until the end year.

I spent some time this afternoon looking at this:

Link

Its a Congressional report from 1998. Its a bit dry but quite interesting.
It addresses how to establish probability factors as an aid to national defence

It shows that congress where looking for a quantitive answer to the likelyhood of another attack on US soil.

Again thanks for all the info ipsedixit.

Originally posted by ipsedixit

To come up with the magic actuarial number you would have to know the
number for every affected insurance policy written then combine them
statistically to come up with the mother of them all. I'm not sure we can get that done in this forum.

Ok.

Heres another way of creating an equation for the magic number.

It may not be scientific, but interesting none the less.

If we new what Silverstein payed for 12 months insurance coverage (A), and divided it with the total amount of money payed out on the claim (B). We would at least know what the odds in Vegas would have to be to make that amount of money.

Any ideas on what figures A and B are ?

One of the articles I cited earlier refers to Silverstein's insurance payment on WTC7 and the amount (substantially larger) that he received in compensation for deciding to "pull it". You might be able to work from that.

I found another interesting site that lists the odds for dying in various circumstances. Here's the link:

www.nsc.org...

One of the particular longshots cited is "Ignition or melting of nightwear, X05` I assume they mean your pyjamas catch on fire or melt if they are made of synthetic fibre. The point I want to make is that this is an unlikely event according to them. The odds of it happening are 1 in 96,950,002, in any given year. Most people would say that this event probably has happened although exceedingly rare. However, because it has happened, the odds, though long, can be calculated.

In the case of the tower collapses on 911, we are talking about an event that has never happened in the history of steel frame construction. The odds of three such collapses happening on one day must be perhaps three times fifty orders of magnitude larger than 1 in 96,950,002, allowing, conservatively, for fifty years of experience in which no such event occurred.

The last calculation in the previous post should probably be more like 1 in 3 times 50 times 365 times 96,950,002 chances that the buildings collapse on 911. If my use of the calculator on my computer is correct, then the odds of the collapses of 911 happening as officially reported are 1 in 5,308,012,609,500. That's using the same degree of likliness as dying from the ignition or melting of one's nightclothes. Since that sort of thing has plausibly occurred and since steel structures have never in history collapsed as on 911, I'm sure a real statistician would assign far larger odds against such collapses occurring.

I don't know anything about statistics. I'm just winging it here. A real statistician could go over these figures. I'm not confident of my formula for determining statistical probability. An expert could work with these figures and give us a ball park statisitical estimate of the chances of the 911 collapses occurring as advertised by the government.

As Jerry Lewis often shrieked, "I dood it! I dood it!"

If you divide by 365 you find that a building collapse as occurred on 911 is likely to occur once every 14,542,500,300 years. That's approximately once every fourteen and a half billion years, rounding it off to the administration's benefit. It's kind of breathtaking when you put it that way. It could be seen as a gullibility index for true believers.

Your a star ipsedixit.

I've been dicking around with numbers, but my mathmatics are horrible.

I think it was because there where just to many digits.

That really is pretty powerfull stuff. Once in every 14 1/2 Billion years. As calculated using standard quantative tools.

Any ideas on what to do with it anyone.

Forgive me if this has already been mentioned as I have not read through all of the posts yet but...
If memory serves me correctly, it seems that I recall at least one of the major insurance companies that was, in some way involved with one of the towers, initially refused payment on claims.
The reason they gave for refusing the claims was due to a clause in the contracts that allowed them to refuse payments if damages were caused due to an act of war.
I really dont know how or if this was ever resolved but I'm willing to bet that they were either forced to pay by a court order or they caved to public pressure.

edit;
Well i shouldve read before posting instead of after lol, it looks like most of what i said has already been covered, sorry bout that

[edit on 17-3-2007 by Kr0n0s]

I'll never match up to Jerry Lewis. (Sorry America, France is right about him.) It's an interesting number though. Whether or not it's accurate. It makes some kind of rational sense (provided my statistical methodology is not glaringly awful, and there is a good chance it is.) Just to know that at minimum the liklihood of the events of 911 are at least three times less likely on a given day than of dying from ignition or melting of nightwear.

Just calculating quickly on the computer, 96,950,002 times 3 divided by 365 is 796,849 (rounded off). That means 911 at the most generous to the werewolves, could only happen once every 796,849 years.

I would love to see these calculations vetted by a real statistician.

Originally posted by ipsedixit
I would love to see these calculations vetted by a real statistician.

Me to ipsedixit.

Do you know how to express the figures as an equation?

I would make verification simpler for a statistician.

I'am an absolute none starter on how to go about doing that. I must have bunked off school that day.

I'm so glad you asked that question. It just so happens that I have been studying algebra to try to refresh my understanding so I can study more advanced kinds of math.

Let x equal the probability of an event happening on any given day.

Let y equal the number of days/years to be considered.

Let z equal the number of events required by the terrorists.

Let X PRIME be the probability that the number of events required by the terrorists will occur on a given day/year.

X PRIME = x times y times z. Voila!!

The dodgy bit is how one incorporates the long history of no collapses into the equation. I simply entered that length of time into the equation as another multiplier. Not sure if that is statistically sound. However, even if it is not included, the likelihood of dying three times in one day from the ignition or melting of one's nightwear is an extreme longshot.

It's a real bear no doubt.

I'am sorry I cant help out.

I say we go with 14.5 Bill to 1, and start printing the T Shirts.

I think we should call it - The ipsedixit equation -

Quick someone enter it into Wikipedia.

Originally posted by Seeker PI
Thats first class work, and a really good example of why this site works so well. Thanks.

quote: Originally posted by ipsedixit

The Terrorism Risk Insurance Act came into effect in November of 2002.
(Link 2) This is an interesting piece of legislation. It requires the
government to reimburse insurers up to $100 billion dollars if another
foreign originated terrorist assault occurs in the US before the end of
2007. (Link 2)

Now thats really intersting isn't it. Looks like the US is safe until the end year.

Or they've selected the payee and the buyoff price to play along...

Thats an interesting line of thought Caustic Logic.

I think the adage " Follow the money" would not be amiss eh?

I guess so. and good work here guys. I didn't read it all but it's got a nice ambiance. I prob should go back and read - only so many wothwhile directions on here to go, and this might be useful. Insurance - money study - ugh, brain shut-off territory - but useful...

Originally posted by ipsedixit
The insurance issues are quite deep here. Some time ago I took the trouble to look into Silverstein's legal woes vis a vis his insurance claims. I (naively) thought "Ah ha, here's where the rubber meets the road. They can fool the public but somewhere down the line some very shrewd and parsimonious insurance people are going to be asked to fork out a truckload of money." I thought the insurance people would take one look at the 911 Commission report and refuse to pay up on what must look like an obvious insurance scam. I found out that there were layers of companies insuring Silverstein and that there was at least one important CIA connection (in the form of executive that was a former high ranking CIA officer) within the insurance companies. It seemed likely at the very least that the fix was in on the insurance side. In the real world, faced with the kind of payouts they were facing, the insurance companies demand a thourough investigation of an actuarially impossible building collapse.

First thought: Yes, that was naiive. At such a point, the companies have a choice: be stingy and insiste fraud - meaning complicity of certain influential american actors, and serious doubt cast on the official story and unleash all that chain reaction would bring...
or...
make some ind of trade-off deal (reminding said parties and others of their ability to do the first) rush their investiagation along, find all is well, and take a bath with the payout, leaving the new foundations of the empire untouched. ...

Silverstein's insurance payout was thus sytematically ensured.

As for odds, didn't see if anyone figured them out, but I agree with ... whoever ... that it was a payout not for jet fuel induced collapses, but for "terrorist attacs," of which probabilities seem to be - 100% in a long enough time frame.

Yeah, there's no question that in '93 a terror attack did occur. And of course, the FBI was cooperating with the perps that time too. So, for sure the odds of an attack per se would not be as long as for a "collapse of steel structure because of fire," (which had never occurred, actually HAS never occured). Cause of collapse is the real issue over which there is so much concern by this forum. You bring up an interesting point though.

It is entirely possible that even if Larry Silverstein and the government had been arrested dancing on their vans and confessed at the cop shop that they did it, most of that 32 billion dollar payout would still have happened. Silverstein wouldn't have got his dough but everyone else would have to be paid.

That might be why the insurance industry is not hopping up and down trying to solve the crime. Silverstein's money is a small part of the equation. They have to pay everyone else anyway, so why rock the boat with the administration. By keeping quiet they are now busily trying to recoup losses by selling terrorism insurance. If they blow the whistle on the perps, they still lose the money, but there is no boom in terrorism insurance sales to enable them to recoup their losses. Nobody is going to buy insurance against fake terrorism.

It's so interesting how all the little puzzle pieces fit together.

Just to expand a little on the previous post. You could say that the "bottom line" in this situation has grabbed the insurance companies by the family jewels and forced their hearts and minds to cooperate with the government's official story. The only financially smart course of action for them to take is to go with the flow, foster the official story and try to sell a lot of terrorism insurance to recoup their $32 billion loss. This is a serious thing because self interest (of management and stockholders both) in effect takes a major financial services industry out of a stance of social responsibility and makes them coconspirators with a group of outrageous felons.

I wonder how many other industries are effected by this same dynamic. Obviously many with financial dependancies to the federal government will fall into this category, but are there other, not so obvious ones whose self interest forces them to follow the government line. This is like one of those toadstool colonies that has a few prominent toadstools on the surface within a few feet of one another and a network of unseen filaments underground spreading connections for acres around them.

Originally posted by ipsedixit
This is like one of those toadstool colonies that has a few prominent toadstools on the surface within a few feet of one another and a network of unseen filaments underground spreading connections for acres around them.

Think Haliburton.

Nice posts Caustic logic and ipsedixit. I cant add to the points youve made, but I've alwys wondered why there wasn't more resistance on the part of the Insurance companies.

When you look at how much work they put into investigating claims made by the public for everyday occurances, I thought for sure they would be all over a reason to not payup.

Maybe privately they did look at it from that angle, BUT concluded it was morally reprehensible or unpatriotic to find a way out........................................Oh yeh really! LOL.

Originally posted by ipsedixit
It is entirely possible that even if Larry Silverstein and the government had been arrested dancing on their vans and confessed at the cop shop that they did it, most of that 32 billion dollar payout would still have happened. Silverstein wouldn't have got his dough but everyone else would have to be paid.

That might be why the insurance industry is not hopping up and down trying to solve the crime. Silverstein's money is a small part of the equation. They have to pay everyone else anyway, so why rock the boat with the administration. By keeping quiet they are now busily trying to recoup losses by selling terrorism insurance. If they blow the whistle on the perps, they still lose the money, but there is no boom in terrorism insurance sales to enable them to recoup their losses. Nobody is going to buy insurance against fake terrorism.

It's so interesting how all the little puzzle pieces fit together.

Ah! Terrorism insurance! A sure effect of 9/11, and obv. at least a partial offset to their WTC loss. Ineed, the pieces fit - to make money they need to fit. This is to our advantage therefore in investigating...