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Insurers market their stability

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In a bid to soothe the fears of b-to-b clients, the insurance companies most affected by the attacks on the World Trade Center have begun broad public relations campaigns touting their financial stability, strength and empathy.

Insurance companies with much financial—and in some cases, physicalexposure to the New York disaster, including American International Group, MetLife Inc. and The St. Paul Cos., are currently running high-profile campaigns that are meant to convey their ability to pay out on looming, massive claims.

Challenges ahead

The insurers face what is perhaps the most challenging time in their history. Initial estimates of losses resulting from insurance claims payouts are between $20 billion and $60 billion. Most estimates put the losses as the single biggest insurance payout ever. (Until all insurers are able to survey the damage firsthandwhich might not happen for several weeksmore reliable estimates are unavailable.)

Insurance marketing watchers praised the industry for its collective approach, and said insurers missives were needed to let the U.S. know, simply, that the money will be there to pay for the damage.

"Theres going to be concern as to whether or not theyre protected because of all the money insurers are going to have to pay out, and reminding people of financial strength is a smart strategy," said George Rosenberg, CEO of The Rosenberg Group, a New York-based consultancy.

Insurers and insurance consultants are publicly stressing their industrys ability to withstand the financial hits. Privately, however, some industry watchers are apprehensive about whether the losses could put some insurers in financial straitsor at least, prompt them to invoke the war exclusion provision, something no company has yet done.

AIG, the largest underwriter of commercial property insurance, has estimated its losses related to the World Trade Center at $500 million. The normally secretive company was anything but in the days following the disaster, which temporarily closed its headquarters, located a mile from ground zero.

AIG not only immediately ran ads in The Wall Street Journal and The New York Times with emergency phone numbers for the company, but also after less than 48 hours put out a widely distributed press release stating that "These losses will not impact the solid financial condition of AIG, the strongest insurance and financial service company in the world."

St. Paul Cos. Chairman Douglas Leatherdale sought to soothe any clients concerns about its ability to withstand its financial hit, estimated at $700 million. "The St. Pauls balance sheet is one of the strongest in the industry, and we have sufficient liquidity to meet our obligations," he said in a statement.

Responding with print ads

Several insurers made extensive use of print ads. New York-based MetLife Inc., for example, has twice run a series of full-page ads in the major dailies in the New York metropolitan area, as well as national messages in The New York Times and The Wall Street Journal. The ads include a toll-free telephone number set up to respond to policyholders filing claims related to the attacks.

Other insurers hard hit by the disaster, including the venerable Lloyds of London, are running less overt campaigns, focusing instead on supplying agents with information to pass along to their clients.

"We consider this manageable," said Adrian Beeby, a Lloyds of London spokesman. Lloyds of London said it expects to pay out $1.9 billion in World Trade Center-related claims. Last week, Standard & Poor downgraded Lloyds of Londons insurance market, which has covered many disasters, including the sinking of the Titanic.

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