Perhaps some of the largest impact felt due to the events of Sept. 11 comes by way of insurance. At the end of September an insurance industry group announced that terrorism and acts of war would most likely be excluded from future insurance policies starting in December, according to a Salomon Smith Barney report. Aside from the obvious damage this might do to credit spreads, the American Insurance Association approximates that "70% of insurance policies without terrorist exclusions expire on January 1st each year," according to the Merrill Lynch CMBS Weekly.

Within the sector, it is the trophy asset class that is likely to feel the biggest impact. These assets, notes Salomon, are not likely to receive new financing or be able to roll existing financing because of the increase in perceived risk and change in risk profiles.

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