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November 9, 2009

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Costs will be staggering

Wednesday, Sept. 12, 2001 | 9:59 a.m.

NEW YORK -- The attacks on the twin towers of World Trade Center could cost insurers more than $5 billion, making the suspected terrorist attack on the 110-story skyscrapers the costliest man-made catastrophe ever, analysts said Tuesday.

While it is expected to take years for the insurers to sort out the losses, dozens of insurers are expected to bear the cost of the damage, including the cost of the towers, which collapsed and burned after being struck by two hijacked airliners, as well as damage to the surrounding area and the cost of office furnishings and equipment.

Specialist reinsurance companies may wind up paying the most for the attack, since insurance underwriters usually protect themselves from potentially crippling losses by splitting the risks -- and the premiums -- from big policies with reinsurers. Big reinsurers like Lloyd's of London, Munich Reinsurance Co., Berkshire Hathaway and Swiss Re, could be the most exposed, analysts said, though it was not immediately clear whether any of these companies were affected.

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