Re: "an act of war" & insurance payments

[Rob Schaap <bantam@xxxxxxxxxxxxxxxx>]

>Don't insurance companies insure themselves?
>I thought it was called reinsurance.
>
> That is correct.

But interesting things come up when a really horrible event, or confluence of
events, occurs.  If memory serves, Australia's own HIH got itself deeply into
reinsurance, and the complexity of relationships that arise out of large
disasters was such that the beancounters were not able adequately to calculate
risk.  Here you have several thousand deaths, several hundred injuries, lots
of enforced unemployment, several rebuildings, several large bankruptcies,
several aeroplanes, a couple of airlines, a couple of airports, a lot of
suits, and gawd-knows-what-else in the mix.  Complexity like that can really
nail a reinsurer.  It nailed HIH.  And HIH nailed Australia's insurance
industry (or rather, its clients) to the wall.

Are there large companies in America who specialise in reinsurance, such that
risk might be less than ideally distributed?

Yours in particularly ignorant speculation,
Rob.