U.S. insurance rater A.M. Best Co. says it does not believe a recent decision that the 9/11 attack on the World Trade Center was two insurable events will result in any rating changes for the nine insurers affected or for their reinsurers.

Best said the two-occurrence verdict will result in an additional US$1.1 billion of losses for the insurers and their reinsurers. Most of the carriers have said the verdict will have little or no impact on 2004 earnings.

“However, had the verdict been favorable to the insurers, reserves previously held for this potential decision could have been allocated elsewhere or added to earnings,” Best said in a release. Best noted that those insurers that did not hold reserves for this outcome may incur a charge to earnings and/or a reduction in their financial flexibility related to their ability to fortify other potential weaknesses in the balance sheet.

“Despite these potential impacts, given the diversification of the losses, the strength of the companies affected and, most important, their favourable 2004 earnings to date—including the significant weather events—the overall financial strength of each of these companies remains supportive of the assigned ratings. “

The nine insurers involved are: Allianz Global Risks United States Insurance Co., a subsidiary of Allianz A.G.; Travelers Indemnity Co. and Gulf Insurance Co., both now part of St. Paul Travelers Cos. Inc.; General Electric subsidiary Industrial Risk Insurers; Royal Indemnity Co., an affiliate of Royal & Sun Alliance Insurance Group plc; Fairfax Financial Holdings Ltd.’s TIG Insurance Company; Tokio Marine & Fire Insurance Co., a unit of Millea Holdings Inc.; Twin City Fire Insurance Co., a subsidiary of Hartford Financial Services Group Inc.; and Zurich American Insurance Co., a unit of Zurich Financial Services Group.