The terrorist attacks of Sept. 11, 2001, hit home for Marriott International Inc., said Bradley R. Wood, senior vp-risk management for the Bethesda, Md.-based hospitality giant, which had two hotels near the World Trade Center. One of the properties was destroyed by the attack on the twin towers, while the other was significantly damaged.
Sept. 11 and its impact on the insurance market led Mr. Wood to become involved in efforts to enact the Terrorism Risk Insurance Act, which provides a government financial backstop for insurers facing losses from future catastrophic terrorist attacks.
The drive to enact TRIA proved successful, and President Bush signed it into law in November 2002. But the act will expire on Dec. 31 unless it is extended. Not surprisingly, Mr. Wood is active in the push for extension as well.
As part of that effort, he serves on the steering committee of the Coalition to Insure Against Terrorism, a Washington-based policyholder coalition. Mr. Wood describes his role "as kind of the risk management representative for CIAT." He said that he is "able to bring some risk management expertise that is beyond the lobbying effort" to extend TRIA through the end of 2007.
Mr. Wood says that his initial role was one educating the lobbyists in insurance and risk management concepts that are "foreign to non-risk management professionals." Although he did not testify, he helped take lobbying strategy and match "it up to the practical aspects of risk management," he said. The act had to be workable for both policyholders and the insurance industry.
He served as the business community's representative who could talk with congressional and Treasury staffs about the terrorism insurance issue, said Mr. Wood. In addition, he acted as "a bridge" linking CIAT with the Risk & Insurance Management Society Inc., and the American Insurance Assn.
Mr. Wood's involvement began because the issue was "important to our company. On 9/11, we lost the World Trade Center Marriott Hotel. That was destroyed after the towers fell. It became very personal to our company.
"While we safely evacuated 2,000 guests and employees that day, we did lose two employees, and we have 11 hotel guests to this day that are still unaccounted for. When you're in a hotel, you don't sign in and sign out. We don't know whether they were caught up in the towers or where they were."
For Marriott, TRIA is important from several perspectives, Mr. Wood said, noting that enacting the federal backstop was "the No. 1 legislative item for the Marriott organization."
TRIA is important "not only from property insurance, which initially was what people thought about-protecting the buildings and the resultant business interruption-but it's also important to a company that has 100,000 employees throughout the United States," he said.
Marriott, like other employers, must ensure it has appropriate workers comp coverage, he said. "This is an issue that is beyond just one employer-it's about the aggregation risk that all employers have of physically cohabiting one particular region that could be impacted by one regional terrorism event."
Mr. Wood said that the nature of Marriott's operations make him a good TRIA advocate.
"Marriott has a national presence out there where we have hotels that are not only in downtown Manhattan high-rises but we also have hotels that are smaller-for example suburban and rural hotels in Iowa.
"We're able to bring a legitimate view of the entire United States and answer the question of whether this is a big-city urban issue or whether this was an issue for all of America," he said. "Marriott as an organization had the breadth to be able to discuss these issues."
As the company's risk manager, "I had a real opportunity to step forward, representing our industry and policyholders as it relates to getting the message out about the importance of TRIA," said Mr. Wood.
"Unfortunately, the policyholder community has not been individually vocal on these issues and often stood behind their associations," he said. Marriott, however, saw an opportunity to "lead the way."
Noting that the company's efforts contributed to the initial enactment of TRIA in 2002, Mr. Wood said they appear to be bearing fruit in the drive for a two-year extension of the act. "It appears right now that we're likely to have an extension of the act-at least we're hopeful of that," said Mr. Wood.
Policyholders in general, he said, "have gotten more engaged in the last six months," he said. "We've seen a real turn from...the summer of 2004, where this looked like it would be going nowhere again."