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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: tradermike_1999 who started this subject	3/19/2003 12:16:36 AM
From: elmatador	Read Replies (1) of 74559

Cargo Insurance Would End 48 Hours Into an Iraqi War By JOSEPH B. TREASTER nytimes.com nternational insurance companies notified the world's airlines and the operators of oil tankers and cargo ships yesterday that their coverage for wartime cargo losses in the Middle East would be canceled within 48 hours of the start of any hostilities in Iraq. The coverage can be renegotiated, insurance brokers said, but at much higher prices. COMMENTS: A nice way to recover the money spent on the war. Some brokers said they regarded the decision on cargo as a precursor to a broader cancellation notice for coverage on the airliners and ships themselves. "We may see something tomorrow," said Andrea Jansz, an analyst at the Willis Group, one of the world's largest insurance brokers. The brokers said that the new prices could be as much as 50 times the prewar prices for cargo coverage and that costs of war coverage for aircraft and ships could easily increase tenfold for a single voyage or flight. As a result, they said, most commercial air and sea traffic to the Persian Gulf region would probably be halted. The brokers said the cancellation of war coverage for cargo would apply to all commercial insurance policies. But they said it was not immediately clear whether the cancellation would extend to coverage that is being provided by the United States government to the troubled airline industry at heavily subsidized prices. Airlines and shipping companies routinely buy war insurance as a part of their overall coverage, and it is intended to pay for losses in "unexpected acts of war," said Stephen Catlin, the chief executive of Catlin Underwriting Agencies, a part of Lloyd's of London.

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