Reinsurance: aggregation of losses

For a decade there has been much speculation amongst lawyers and insurers as to whether the events in New York City on 9/11 constituted one event or two events for insurance purposes. An answer has now been given, by Field J in Aioi Nissay Dowa Insurance Co Ltd v Heraldglen Ltd and Another [2013] EWHC 154 (Comm).

This was an appeal on a point of law from an arbitral award under section 69 of the Arbitration Act 1996. The question was whether the losses sustained by the defendants on 10 inward reinsurance contracts arising out of the 9/11 attack on the Twin Towers of the World Trade Center were caused by one or more occurrences or series of occurrences “arising out of one event” for the purposes of applying policy limits and deductibles in four retrocession excess of loss reinsurances. Field J’s decision is considered by Katie Powell of 4 New Square.