The World’s New Respect for the U.S.

Remarkably few events are timed precisely enough to shift the focus of an entire nation. In the last century only three come immediately to mind—August 1914, October 1929 and December 1941. While change is the only true constant in life, most changes are incremental. But Sept. 11, 2001 may have wrought such a change in America, that one can truly say the country will never be the same again.

Having lived in France for the last 25 years, I have a sort of “out of body experience” when it comes to America. I’m constantly amazed by the intelligence and ability of my fellow countrymen—but also somewhat dismayed that their priorities don’t necessarily include things that concern the rest of world.

After Sept. 11 a number of European leaders paraphrased JFK’s famous Berlin quote, saying, “We’re all New Yorkers.” America has been drawn, brutally, horribly but inexorably into the cauldron of the world’s conflicts. It’s no longer just international companies—the AIGs, the McDonalds, the Exxons and the IBMs—that are impacted, but everybody.

Before Sept. 11, if you asked anyone outside of the insurance or financial community what they thought about reinsurance, many probably would have asked, “What’s a ‘Re’, and why does it need insurance?” Even without Larry Silverstein and Swiss Re, most people now have at least a passing awareness that their insurance companies reinsure their risks.

Muslim countries were almost off the radar screen, except for worries about oil prices, Iraq and the Palestinian/Israeli conflict. Afghanistan was some Asian mountain range named after a guy called “Stan,” who seemed to have been everywhere in that part of the world. (Dave Barry’s line—not mine). This is certainly no longer the case.

The U.S. has become the leader in a war unlike any previous conflict. Winning it will take a great deal more than destroying bin Laden and the Taliban. The joy in the streets of Kabul has yet to be repeated elsewhere in the Islamic world, but it could be, if the U.S. seriously considers not only destroying the terrorists, but also the root causes that produce them—poverty, ignorance and corruption.

For too many years, U.S. policy has been driven by its energy needs. As long as the oil flowed, all was well. The countries that produce that oil, however, and those that depend on them have reached a point that has strained their societies to the limit.

In France, the younger generation of the country’s almost 5 million Muslims is, for the most part, as secular or religious as its Catholic, Jewish or Protestant counterparts. Fundamentalist clerics, scared of the modern world, resist what they call “heresy” at all costs. Such fear can lead to the advocacy and commission of acts like those that occurred on Sept. 11. But extremists are in the minority, and the task of the U.S. and other Western nations is to support the modernizers in Islamic countries who are trying to achieve social and political reform.

In that quest, as well as others, the insurance industry’s support is vital. Heretofore it’s been like elevators—no one really thinks about how indispensable they are until they don’t work. Now leaders like AIG’s Hank Greenberg, and Berkshire Hathaway’s Warren Buffet have stressed the integral part insurance plays in business transactions. Their message is clear. Terrorist coverage can no longer be priced reasonably—just as there’s no way to accurately assess the risks. If it becomes unavailable, it may jeopardize the entire global economy.

Changes will be necessary, eventually some kind of federal legislation. But if the U.S. is going to enhance its security and assure the survival of crucial industries, it needs a strong and vital insurance industry. After Sept. 11, most people now know the world won’t wait.

Greenberg recently told Congress that without insurance coverage, 70 percent of which is due for renewal in January, a massive breach of contractual terms will occur. In a terse comment on a House version of the terrorist bill that called for government payments to insurers to be treated as loans he reportedly said, “We don’t need a loan. I don’t want any loans. I want reinsurance.”

The world now has more respect for the U.S. than I can ever remember. Not just in France, which—to say the least—is unusual, but in the rest of Europe and the world. Hard-headed realists, like Greenberg, have revived and strengthened a line of thought that goes back to Edmund Burke, “All that is needed for evil to triumph is that good men do nothing.”

The world, even people in all those “Stans,” is counting on the power and the commitment of the U.S. to lead the war against terrorism. Given the will and the proper tools, it will prevail.

Topics USA