Leading European insurance groups are set to combine resources to establish a Luxembourg-based company to cover property against acts of terrorism.The agreement comes after calls by insurers and reinsurers, following the September 11 attacks, for state/private partnerships to cover the threat of losses from terrorist action.
Zurich Financial Services, XL Capital, Swiss Re, France's Scor, Hannover Re and Allianz have agreed to support the company, which will be called Special Risk Insurance and Reinsurance Luxembourg (SRIR). The company aims to start underwriting by the end of the year, and will be backed by Eur500 million in capital.
The companies said SRIR would limit losses to Eur275 million per event within a radius of 600 metres. Business interruption losses will not be insured.
In a joint statement, the companies stressed that private solutions “remain complementary to state-sponsored schemes… and are not meant to replace them”. A spokeswoman for Zurich Financial Services said the private solution was created in order to provide cover as soon as possible.
Scor holds a 9.1% stake in the SRIR. The other backers have 18.2% each.
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