As underwriters prepared to sharply increase rates for shipping and aviation coverage, Lloyd's of London said Friday it will open its insurance market on weekends for the first time in 25 years if war erupts in the Persian Gulf.
The market would be opened to allow clients to renew their insurance in the face of higher risks, said Alan Lord, Lloyd's chief executive."It would be out of the question for Lloyd's to leave airlines unable to take off because they had no cover," Lord said. "Within two hours of our intelligence service - which is as good as any in the world - giving notice that war had broken out, the markets would be open."
Meanwhile, underwriters prepared to increase insurance rates for air carriers thought to be vulnerable to pro-Iraqi terrorist attacks around the world.
"We are concerned at the threat of terrorism, and we've asked airlines to increase security," said Stephen Merret, chairman of the Lloyd's Underwriters Association.
Individual underwriters would increase rates or refuse to quote a rate to airlines judged to be at risk, he said.
A ship headed for the gulf is liable to face insurance rates up to 70 times higher than a similar ship and cargo headed for the Atlantic Ocean would incur, Lord said, warning rates could go much higher if hostilities break out.