LONDON, July 9 (UPI) -- British companies will almost certainly be forced to pay more for terrorist insurance following the London bombing.
Insurance brokers told The Times newspaper in London that the cost of terror cover was likely to rise within days as underwriters factored-in the increased risk of another attack in Britain despite the fact that the government is expected to bear most of the cost of the London bombings.
"The financial loss from today does not look like it will be massive," Theo Butt, leader of the terrorism placement team at Marsh, the world's largest insurance broker, told The Times. "What may harden rates is the fact that an attack has actually occurred, that the risk is now higher."
Experts moved quickly to calm fears that the London attacks would trigger a meltdown in the insurance market as happened after the Sept. 11, 2001, terrorist attack on the World Trade Centre in New York, when insurers and reinsurers all but withdrew cover, the newspaper said.
William Hawkins, a European insurance analyst at Keefe, Bruyette & Woods, the stockbroker, told the paper: "This is unlikely to be an event that crystallizes a systemic crisis in the United Kingdom or global insurance or reinsurance industries."
The terror attacks on London's mass transit system Thursday came just days after an Organization for Economic Co-operation and Development report gave warning that there were huge gaps in the terror cover bought by companies.
The lack of appropriate cover put countries at risk of greater economic damage than was caused by the Sept. 11, 2001 attacks, according to the report. A single, huge attack could cost the world economy up to $250 billion, the OECD said.
