And combining the two threats, terrorism and pandemic, considering how awful things have gotten in New York with the Coronavirus you have to ask what would be the result of a concerted bio-terrorism attack?
From "Two Factoids On The Covid-19 Situation In New York York City", way back on March 27
...And the troubling news.
Through Thursday at 5pm there have been 4720 hospitalizations.
Bad enough on its own but when combined with the reports of hospitals being overwhelmed you have to ask, what if something really, really big happened?
New York is one of the top two or three terrorism targets in the United States. How would the system respond if there were say 25,000 bioterrorism or biochemical terrorism victims in one day?
Or even 10,000?
You'd have thought that of all the places on earth that would have been prepared it would have been New York City, but no.
4700 hospitalizations seems so quaint with New York deaths over 25,000 40 days later.
And from Artemis May 5:
For Berkshire Hathaway, the insurance and reinsurance underwriting conglomerate led by Warren Buffett, it’s not simply a question of carefully crafted exclusions when it comes to pandemic risks, for the so-called Sage of Omaha is perfectly happy to underwrite it, as long as the price is right.Berkshire Hathaway reported its first-quarter results on Saturday and as our sister publication Reinsurance News reported at the time, the insurance and reinsurance underwriting performance suffered, with the Covid-19 pandemic one of the key drivers.
...MUCH MORE
Overshadowing the performance of Berkshire Hathaway’s insurance and reinsurance underwriting divisions though, was the massive unrealised investment losses from the quarter that amounted to some $55.5 billion.
The P&C reinsurance unit of Berkshire Hathaway experienced losses of $2.12 billion in Q1 2020, higher than the $1.774 billion in the prior year period.
But the impacts of the pandemic were evident in this, as Buffett’s P&C reinsurance arm reported Covid-19 related reinsurance claims from Q1 amounting to $230 million.
Covid-19 and pandemic risks in general are not just seen as a threat at Berkshire Hathaway though, as the reinsurer is happy to underwrite them as long as the returns are risk commensurate.
Speaking during the Berkshire Hathaway annual meeting on Saturday, Warren Buffett explained, “We insure a lot of things. We had somebody come to us the other day wanting insurance involving a $10 billion protection on something very unusual. We’re not going to make that deal in all probability, in fact, I would say it’s dead. But we would have written pandemic insurance if people had come to us and offered us what we thought was the right price.”
Buffett went on to say that they may well have been wrong to do so, but at Berkshire Hathaway his underwriters are encouraged to look at the biggest risks the world faces, pandemics included....
In a way Berkshire is like a Lloyd's of London syndicate but with a lot more money, willing to write custom coverage but because of the super-long tail and the unknowns, for a very pretty penny.
*July 2014
It's Time to Stop Subsidizing Warren Buffett and the Rest of the Insurance Gang (BRK; TRV; ALL; CB)
We're not intending to call out just Mr. Buffett's heavyweight property/casualty and reinsurance operations but rather the whole herd of porkers feeding at this particular trough.
It's just that since his comments at the 2002 annual meeting that the odds of a nuclear attack on Manhattan were "inevitable" by 2052, Buffett has carried water for the whole industry.
Page 9 of the BRK 2002 Annual Report has some more of his thoughts. It's all about the money.
Because the "temporary" 'Terrorism Risk Insurance Act' backstop is in place, the insurers and reinsurers are able to sell product that has brought in at least $40 Billion in profits in the last thirteen years.
(premiums paid with no claims pretty much drops straight to the profit line)
I understand the New York Congressional delegation, from Schumer down to the newest Rep. being all for the reauthorization, it's a pretty sweet deal if you can get the rest of the country to subsidize your real estate market but be forthright and say you're in favor of corporate welfare.
One last point. A nuke in NYC causes at least a $Trillion in damage and I'm guessing the insurers haven't squirreled-away that $40 Bil so they'll be able to meet their obligations when the time comes or as capacity to do more risk-management-good-works.
What I'm saying is, just be honest: the government will end up paying anyway so there's no reason to hand out $3 billion a year while we wait for the "inevitable". And at his core, Warren is an insurance salesman from Omaha.
And quite a bit more via the 'search blog' box.
Finally, I'm not sure how pandemic coverage would account for something like this directive a couple days before I was blathering on about the man-made risk in that factoids post:
DATE: March 25,2020
TO: Nursing Home Administrators, Directors of Nursing, and Hospital Discharge Planners
FROM: New York State Department of Health
....No resident shall be denied re-admission or admission to the NH solely based on a confirmed or suspected diagnosis of COVID-19. NHs are prohibited from requiring a hospitalized resident who is determined medically stable to be tested for COVID-1 prior to admission or readmission.....
Underlining in original.
