Coverage on Milan Tower Unclear

April 22, 2002

Although most reports agree that Generali SpA, Italy’s largest insurer, wrote the primary coverage on the 30-story Milan building, know locally as Il Pierllone after the tire company that was once headquartered there, it’s still unsure what the damages will amount to, and what reinsurers may have coverage.

According to a report from Dow Jones Newswire the building has € 400 million ($357 million) in overall coverage, and a special policy covering terrorist attacks up to $42 million ($37.5 million). Generali, however, indicated that its net exposure, after reinsurance recoveries, would be limited to between € 3 and € 4 million ($2.67 and $ $3.57 million).

Reports have speculated that Swiss Re, Munich re and Lloyd’s may have some exposure, but a Lloyd’s spokeswoman stated on Friday that she wasn’t aware that any of the syndicates had any exposure to losses stemming from the crash.

Swiss Re has indicated that it doesn’t have any loss exposure, and Munich Re said only that its Italian subsidiary was examining the possibility, and couldn’t other wise comment on it.

The cause of the crash, which took the lives of the pilot and at least two others, as well as injuring several dozen, remains a mystery. The pilot, Luigi Fasulo, 67, of Pregassona, Switzerland, a small town hear Locarno, was reported to be highly experienced. So far investigators haven’t determined why the plane flew into the 25th and 26th floors of Il Pierllone at 5:45 p.m. on a clear day.

The crash raised harrowing images around the world of the Sept. 11 attacks on the World Trade center, but Italian authorities have excluded any terrorist connection. Fasulo had reported having landing gear trouble, but hadn’t sent out a distress signal. Family members have also denied reports that he was having financial troubles which could have led to a suicide.

Although the two floors struck by the plane suffered heavy fire damage, local inspectors have said that there was no structural damage, and, as the fire was relatively quickly contained damages to other portions of the building are minor.

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