Following the disastrous September 11th attacks, the rates for catastrophic group life reinsurance coverage ballooned tremendously, according to Insurance News Net. It has taken almost a decade for the country, and the industry, to recover.
Reinsurance is a way of ceding financial risk from one insurance company to another, according to the Insurance Information Institute.
"There was significant impact right after 9/11 in terms of rates charged for catastrophic cover and also a capacity issue - the number of reinsurers in the marketplace, and the amount of coverage they could afford," Jim Rathburn, senior vice president of an insurance firm, told the news outlet.
Today the market is finally growing and beginning to prosper with the addition of accident carve out coverage, according to the news source. This type of policy allows primary policy sellers to cut-out the accidental death risk included in many life insurance policies, but keep the predictable mortality risks, such as disease.
This new type of policy has not completely reformed the market, but experts believe it is a step in the right direction. Life warranty triggers have also been changed so now there has to be a minimum of three deaths for the event to be deemed catastrophic.