Managing Economic Risk in the Age of Terror

The attacks of September 11 cost al Qaeda roughly $500,000 to plan and execute, but created up to $500 billion in economic impact, including an estimated $90 billion in the New York metropolitan area. The insurance industry paid more than $30 billion in claims for a risk it had not anticipated within the United States before 2001. In the aftermath, commercial terrorism risk insurance for businesses, particularly within major cities presumed to be potential targets for future attacks, was expensive, and was difficult if not impossible to obtain. This uncertainty regarding the availability of financial protection from a future attack sent ripple effects across the U.S. economy. In response, Congress in 2002 passed the Terrorism Risk Insurance Act or TRIA which provided government backing, subject to specific conditions that have changed over time, for the private commercial insurance market. Some view the law as a necessary shared responsibility between government and the private sector, while others see it as an inappropriate government intervention that has inhibited the market from effectively responding to an evolving risk.

Congress is now considering renewal of the Terrorism Risk Insurance Act and the Center for American Progress has invited economic and security experts, together with corporate representatives, to consider what Congress should do now and how to protect the U.S. economy, including large and small business sectors, well into the future. What is the ongoing risk of terrorism to the United States? How does terrorism affect companies of various sizes and in different parts of the country? If TRIA should be renewed, how should it be structured to provide the maximum protection to the U.S. economy? Should the American taxpayers be compensated for the protection the government provides the insurance industry? Does government belong in the insurance business and if so for how long? What is the long-term solution?

Featured Panelists:
Janice M. Abraham, President and CEO, United Educators Insurance
Frank J. Cilluffo, Associate Vice President for Homeland Security, The George Washington University
Dr. Lloyd Dixon, Senior Economist, RAND
Michael T. Gray, President and Director, Gray Insurance Company
Dr. Erwann Michel-Kerjan, Managing Director, Risk Management and Decision Processes Center, The Wharton School, University of Pennsylvania
Clifton E. (Chip) Rodgers, Jr., Senior Vice President, Real Estate Roundtable
Bradley Wood, Senior Vice President of Risk Management, Marriott International, Inc

Panel Moderators:
P.J. Crowley, Senior Fellow and Director of Homeland Security, Center for American Progress
Dr. Christian Weller, Senior Fellow and Senior Economist, Center for American Progress

Monday, May 21, 2007
Program: 9:00am to 12:00pm
Admission is free.

A light breakfast will be served.

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Biographies

Janice M. Abraham joined United Educators Insurance as President and CEO in January 1998. Ms. Abraham served the higher education community through her work as Chief Financial Officer/Treasurer at Whitman College, various senior positions at Cornell University. She holds an MBA from the Wharton School of Business at the University of Pennsylvania and a Bachelor’s degree in International Studies from American University. Ms. Abraham was named the “2004 Insurance Woman of the Year” by the Association of Professional Insurance Women.

Frank J. Cilluffo is Associate Vice President for Homeland Security and Director, Homeland Security Policy Institute at The George Washington University. He leads the University’s homeland security efforts on policy, research, education, and training and directs the multi-disciplinary Homeland Security Policy Institute (HSPI), a unique, nonpartisan “think and do tank” that builds bridges homeland security theory and practice. The Institute’s recent policy and research agenda has spanned domestic terrorism and radicalization, disaster management and emergency preparedness, pandemic influenza planning and bio-defense, intelligence and information sharing, and a host of other national and homeland security matters. He also teaches a graduate level course on counterterrorism and homeland security at the Elliott School of International Affairs. Cilluffo joined GW in April 2003 from the White House where he served as Special Assistant to the President for Homeland Security. Shortly following the September 11, 2001 terrorist attacks on the United States, Cilluffo was appointed by the President to the newly created Office of Homeland Security, and served as a principal advisor to Governor Ridge. Prior to his White House appointment, Cilluffo spent eight years in senior policy positions with the Center for Strategic & International Studies (CSIS), a Washington based think tank. At CSIS he chaired or directed numerous committees and task forces on homeland defense, counterterrorism, transnational crime, and information warfare and information assurance. His works have been extensively published extensively in academic, law, business, and policy journals, and magazines and newspapers worldwide. He has testified before the United States Congress on a number of occasions and has been a regular guest on major television and radio networks worldwide. Cilluffo presently serves and has served on various national security-related committees sponsored by the U.S. government and non-profit organizations, including the Homeland Security Advisory Council, where he served as the Vice Chairman of the Future of Terrorism Task Force, chaired by Congressman Lee Hamilton. Cilluffo currently is a member of the HSAC Secure Borders and Open Doors Advisory Committee.

Philip J. (P.J.) Crowley is a Senior Fellow and Director of National Defense and Homeland Security at the Center for American Progress. During the Clinton administration, Crowley was Special Assistant to the President of the United States for National Security Affairs, serving as Senior Director of Public Affairs for the National Security Council. Prior to that, he was Principal Deputy Assistant Secretary of Defense for Public Affairs. In all, Crowley was a spokesman for the United States government and United States military for 28 years, 11 of those years at the Pentagon and three at the White House. He served for 26 years in the United States Air Force, retiring at the rank of colonel in September 1999. He is a veteran of Operations Desert Shield and Desert Storm. During the Kosovo conflict, he was temporarily assigned to work with then NATO Secretary General Javier Solana.
Prior to joining American Progress, he served as a national spokesman for the property/casualty insurance industry, focusing on strategic industry issues that included the impact of terrorism on commercial insurance in the aftermath of the World Trade Center tragedy and to the effect of asbestos litigation on the broader economy.

Dr. Lloyd Dixon is a senior economist at the RAND Corporation who was recently named one of the Institute for Civil Justice (ICJ) Distinguished Scholars for 2006-2007, recognized for his leadership in developing a research agenda in insurance, liability, and compensation for catastrophic events. Two of his studies, Compensation for Losses from the 9/11 Attacks and Issues and Options for Government Intervention in the Market for Terrorism Insurance, have formed the basis for continuing research in this area. Dr. Dixon’s areas of expertise include the environment, expert evidence, insurance issues, national flood insurance protection, and terrorism risk insurance. Dr. Dixon has a Ph.D. in economics from the University of California, Berkeley, and a B.A. in political science and a B.S. in general engineering from Stanford University.

Michael T. Gray is the President and Director since 1996 of The Gray Insurance Company, a Louisiana-based Property and Casualty company founded in 1978. He has held executive and senior-management positions in the insurance industry for the past 24 years. Gray is the co-founder of The Gray Casualty & Surety Company in 1996 and has served as a Director of the Louisiana Insurance Guaranty Association since 1995.

Dr. Erwann O. Michel-Kerjan is Managing Director of the Wharton School‘s Risk Management and Decision Processes Center, a center with over 20 years of experience in the development of strategies and policies for dealing with extreme events. As large-scale risks reshape the future of an increasingly interdependent world, Erwann has worked over the past 10 years helping corporations and governments address this new landscape, develop appropriate solutions and create market opportunities. His most recent book is Seeds of Disaster, Roots of Response. How Private Action Can Reduce Public Vulnerability (Cambridge University Press, 2006). In 2007, Dr. Michel-Kerjan was named a Young Global Leader by the World Economic Forum (Davos), a five-year nomination bestowed to recognize and acknowledge the most extraordinary leaders of the world under the age of 40.

Clifton E. (Chip) Rodgers, Jr. is senior vice president of The Real Estate Roundtable, which is America‘s leading advocacy group for the commercial real estate industry on national policy issues in Washington. Its members include the chief executive officers of the leading U.S. commercial real estate owners and investors, senior managers from the major commercial and investment banks and the elected leaders of the national real estate trade associations.
As the Roundtable’s principal government relations and public policy strategist for credit, capital market and risk management policy issues, Rodgers has been involved in every major piece of financial services legislation and regulatory action for over a decade. In this capacity, he devises and implements government and public affairs strategies, analyzes policy issues, advises clients, develops communications and messaging to policymakers and coordinates coalition tactics. In addition to his position at the Roundtable, Rodgers works with the Advisory Board of the RAND Corporation’s Center for Terrorism Risk Management Policy. He is a founding member of the steering committee of the Coalition to Insure Against Terrorism (CIAT); a founding director of the Bank of Georgetown in Washington, DC, and serves as an industry trade advisor to the Office of the U.S. Trade Representative and the U.S Department of Commerce. He has also served on a number of other civic, educational and corporate boards. He is listed in Who’s Who in America and has appeared on the CBS Evening News, CNBC’s Squawk Box and PBS’ Nightly Business Report. In 1991, Rodgers was appointed by President George H. W. Bush to direct the U.S. Treasury Department’s office of business liaison, where he focused on tax, trade and credit issues affecting America‘s business and financial services sectors. Rodgers joined the National Realty Committee (predecessor to The Real Estate Roundtable) in 1996. He began his career at the Mellon Bank in 1979 and has 15 years of experience in capital market and real estate investment banking activities at Fannie Mae, The First Boston Corporation, Phillips Realty Capital, a Goldman, Sachs & Co venture with the J.E. Robert Companies (now known as the Archon Group), and Legg Mason.
A native of Pennsylvania, Rodgers earned his B.A. from Hampshire College and also attended Yale University. While at Yale, he worked extensively with the The Papers of Benjamin Franklin and as a research assistant for Robert Penn Warren. He is married and has two sons.

Dr. Christian E. Weller is a Senior Fellow at the Center for American Progress. His expertise is in the area of retirement income security, macroeconomics, and international finance. Prior to joining the Center, he was on the research staff at the Economic Policy Institute, where he remains a research associate. Dr. Weller has also worked at the Center for European Integration Studies at the University of Bonn in Germany, under the Department of Public Policy of the AFL-CIO in Washington, D.C., and in banking in Germany, Belgium and Poland. Dr. Weller is a respected academic with close to 100 publications in academic and popular publications. His academic publications have appeared in the Journal of Policy Analysis and Management, the Journal of Development Studies, the Cambridge Journal of Economics, the Journal of International Business Studies, the Journal of Aging and Social Policy, and the Journal of Economic Issues, among others. His popular writings have been published in the New York Times, USA Today, and the Atlanta Journal Constitution. In 2006, he was awarded the Outstanding Scholar-Practitioner Award from the Labor and Employment Relations Association. His work is frequently cited in the press and he is often a guest on national TV and radio programs. Dr. Weller holds a Ph.D. in economics from the University of Massachusetts at Amherst.

Bradley Wood is Senior Vice President of Risk Management for Marriott International, Inc., having enterprise-wide responsibilities for Marriott’s risk management organization, including global insurance and self-funded programs, safety and security, claims administration, occupational health services, crisis management, business continuity planning, risk finance and systems. Mr. Wood is a member representative of the Steering Committee to the Coalition to Insurance Against Terrorism (CIAT), which represents a wide range of business insurance policyholders on the federal Terrorism Risk Insurance Act. His efforts towards this legislative milestone have been widely recognized, including as the recipient of the 2003 Richard W. Bland Award by the Risk & Insurance Management Society and the 2005 Business Insurance Risk Management Honor Roll Award. Mr. Wood has an M.B.A. from The University of Wisconsin and maintains the Chartered Property & Casualty Underwriter (CPCU) and Associate in Risk Management (ARM) professional designations. He is a member of AIG’s National Accounts Advisory Board, the National Summit for Pandemic Influenza Advisory Board and served on FM Global’s Risk Management Executive Council. Mr. Wood’s views on terrorism and political risk insurance, alternative risk financing, business continuity and reputation risk have been frequently chronicled in business and trade publications.