Lloyd's Stiffens Iraq Policy Requirements
By Daniel Hays
NU Online News Service, May 17, EDT, 1:19 p.m. EDT?Lloyd's syndicates, reacting to the increased level of violence in Iraq, are asking customers buying death and dismemberment coverage in the region to assume higher policy deductibles, an executive with Hiscox noted.[@@]
David Bruce, divisional head for Hiscox Syndicate 33–which underwrites inside the Lloyd's market under that name and outside the market as Hiscox Insurance Company–said his syndicate and others at Lloyd's have provided personal accident insurance for Iraq "ever since the Americans went in there." However, he added, "what has changed is now for a large group you want a pretty large deductible."
The large deductible, he said, provides an extra incentive for companies to keep their personnel safe.
Companies that obtain accident insurance from the dozen or so Lloyd's syndicates that offer it include "television companies, contractors, munitions people, advisors, consulate people, support workers," Mr. Bruce noted.
Policies cover accidental death, loss of a limb or eye, and permanent total disablement from occupation. A policy for ?100,000 ($176,780, at current exchange rates) for a journalist might cost 1.5 percent a week or ?1,500 ($2,651), he said.
For a contractor insuring more than a thousand people, the rate would be different and it would be adjusted "depending on whether you're in a secure base," he added.
Lloyd's, he said, is happy to provide the expensive coverage, noting that "some people will pay your price or they won't. Sometimes they self-insure or find someone to do it cheaper.
The most expensive, area, Mr. Bruce said, "is basically Baghdad. That's where all the problems are–up in the northern areas."
In general, he said, rates have not increased a great deal because the price was already high to begin with.
Players at Lloyd's, he said, consider themselves "the experts on personal accident war business," noting there is a substantial amount of aggregate exposure covering personnel in Iraq–well into the millions.
Most of the time, Mr. Bruce said, policies exclude nuclear, biological and chemical attack unless companies are willing to pay a special premium.
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