Commercial premiums face huge rises

The insurance company Axa says that its commercial premiums face hefty hikes in the aftermath of the terrorist attacks in the US.

The company said its Corporate Solutions subsidiary planned to raise commercial property cover by 80%, and liability insurance could go up by 35%.

The firm said rates had been due to go up by to 40% before the terrorist action because of cost pressures within the industry.

Last year, Axa said, rates went up by between 10-20%.

Axa itself has so far put its exposure to claims related to the attacks at $550m (£380m).

World Cup hopes

Also on Monday, a separate part of the Axa group, Axa Colonia, said it was hopeful it would reach a new agreement with football's world governing body FIFA on cover for the 2002 World Cup.

"We expect there will be a new agreement in one form or the other," a spokesman for the company told the Reuters news agency.

Axa Colonia is leading a consortium of international insurers providing cover for next years tournament, but last week cancelled its existing policy with FIFA.

The higher risks surrounding the event after last month's terrorist attacks were blamed for the cancellation.

Royal & Sun

Meanwhile UK insurer Royal & Sun Alliance has said some of its commercial rates could also be set for big increases, but this would only be in "specific areas of very high risk".

Last week, the company said it had increased its estimate of its total costs resulting from the attacks on the World Trade Center from about £150m to around £200m.

The company also said premiums for personal property and other personal insurance could rise, but by smaller amounts than for commercial polices.

It said the increases in domestic polices are because of the effects of last year's floods and the rise in personal accident claims, and not because of last month's terrorist attacks.