



Categories

Reinsurance

Swiss Re
Time
1907
Locations
San FranciscoCountries
United Arab Emirates, United Arab Emirates, United Arab Emirates
The unique combination of earthquake and conflagration in the San Francisco disaster triggered an international debate within the insurance industry as to whether fire losses caused by an earthquake are covered or not. The fact that seven different and incongruent earthquake exclusion clauses were being used in the industry further complicated the loss settlement.
As a result, in August 1906, Swiss Re Manager Charles Simon, along with representatives from Munich Re, Cologne Re (now Gen Re) and Badische Rückversicherung, formed what later was to be called the Earthquake Commission. The aim was to create uniform treaty wordings in order to avoid lengthy court cases in the future.
To find appropriate wording that would categorically exclude direct and indirect earthquake damage, fire policies from all around the world were collated and compared. Simon was responsible for carrying out the analysis in Southern Europe, France and Switzerland. Within just six months, the Earthquake Commission had evaluated over 1000 earthquake clauses from 43 countries, which it then presented as a study. The study listed by country those insurance companies with earthquake clauses in their policies, the relevant wordings used, and the shortcomings.
In June 1907, the Earthquake Commission sent the study to fire insurance companies in the hope that they would establish uniform, improved treaty wordings for their country and that these would be anchored in the relevant national laws.
The study received wide acclaim in Europe, and policy terms and conditions were adapted in most countries. In the US, however, most federal states passed standard policy laws in accordance with the New York example, which set out the liability of the insurance companies.
As a result, in August 1906, Swiss Re Manager Charles Simon, along with representatives from Munich Re, Cologne Re (now Gen Re) and Badische Rückversicherung, formed what later was to be called the Earthquake Commission. The aim was to create uniform treaty wordings in order to avoid lengthy court cases in the future.
To find appropriate wording that would categorically exclude direct and indirect earthquake damage, fire policies from all around the world were collated and compared. Simon was responsible for carrying out the analysis in Southern Europe, France and Switzerland. Within just six months, the Earthquake Commission had evaluated over 1000 earthquake clauses from 43 countries, which it then presented as a study. The study listed by country those insurance companies with earthquake clauses in their policies, the relevant wordings used, and the shortcomings.
In June 1907, the Earthquake Commission sent the study to fire insurance companies in the hope that they would establish uniform, improved treaty wordings for their country and that these would be anchored in the relevant national laws.
The study received wide acclaim in Europe, and policy terms and conditions were adapted in most countries. In the US, however, most federal states passed standard policy laws in accordance with the New York example, which set out the liability of the insurance companies.