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City terror insurance to cost firms 300% more

Saturday 05 June 1993 18:02 EDT
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PREMIUMS on insurance against terrorist attacks in the City of London are to be increased by the Government by up to 300 per cent.

The Department of Trade and Industry said last night that Neil Hamilton, the corporate affairs minister, would meet a delegation of interested parties on Wednesday to discuss the decision.

The Government, which is the only reinsurer of terrorism cover, decided to go ahead with the increases because of the risk that the new terrorist reinsurance body Pool Re could run out funds.

The bomb in Bishopsgate in the City in April caused millions of pounds in damage, draining Pool Re's resources. If the fund ran dry, public money might have to be pumped into it. A DTI spokeswoman said: 'A terrorist review was carried out and Pool Re have restructured the system of tariffs.

'In some cases that is going to involve premium increases of up to 300 per cent. Elsewhere, in low- risk areas, there are going to be some decreases.'

The Association of British Insurers, which had resisted the increase, said it was disappointed with the Government's decision, which was taken last Thursday.

On Friday, the Corporation of London announced measures aimed at reducing the terrorist threat in the City and revealed it was considering proposals to restrict traffic in the centre of the Square Mile.

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