Insurer Braces for $300-Mil Loss; Won't Invoke War Acts Clause

BOSTON-Liberty Mutual Group is looking at after-tax net losses in the neighborhood of $200 million to $300 million resulting from claims related to last week’s bombings, the company announced yesterday. But in a high-road move, the firm says it will not attempt to duck claims if the government deems the attacks an act of war.

Company chairman, president and CEO Edmund Kelly, in yesterday’s statement, says the firm has “the financial strength to absorb these losses,” and that it is “already meeting our obligations to help our policyholders recover as quickly as possible.” With regard to widespread speculation that insurance companies will attempt to invoke war-acts exclusions as a shield from potential attack-related claims, Kelly says, “We have a very strong capital position and the liquidity to meet our obligations to policyholders. These situations are what we are in business to handle.”