Is terrorism risk insurable in the old-fashioned way?

Insurers ultimately will find it impossible to underwrite terrorism risks the old-fashioned way because predictability cannot be reliably modeled into the equation, industry officials here agreed. The traditional way in which companies write insurance cannot be applied to terrorism, according to Terri Vaughan, president of the Kansas City, Mo. based National Association of Insurance Commissioners. Instead, questions need to be answered about the type of risk being written and if a private risk is to be underwritten differently from a public one, Ms. Vaughan noted during a panel discussion here on "Responding to Terrorism, the PC Landscape in the Wake of 9/11," at the 80th annual convention of the Downers Grove, Ill.-based Alliance of American Insurers. Ms....