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Insurers pledge no premium hikes or job cuts

Insurers counting the cost of the damage caused by last week&#39s terrorist attacks are adamant that there will not be premium rises or job losses in the UK.

A string of insurers with a strong presence in the UK have insurable losses in the US. Both Axa and Zurich Financial Services expecting their exposure to be in the region of $400m (£273m). Axa has confirmed that the vast majority of its exposure is on the non-life side.

Royal & Sun Alliance is estimating its exposure at around £150m, and admits that its profits will be affected but says it will not increase premiums. Direc-tor of public relations Steve Clark says: “We are financially sound but this will hit our bottom line. This will have an impact upon our profits this year.”

Reinsurers Munich Re and Swiss Re are both reckoned to be facing losses in the region of £700m while Lloyd&#39s of London could face a £1bn hit although it will have in turn insured its own risks.

Levels of life and injury payouts are being scaled down as fatality figures are being revised down from the original feared 20,000 to nearer 5,000, although insurers will face hefty claims for highly paid and highly covered Wall Street workers.

Insurers are playing down fears of increased premiums for life insurance, as UK funds are ring-fenced and would only be affected if there was a serious threat to a company&#39s financial strength. They say the insurance business is all about paying out on disasters such as this.

Zurich Financial Services media relations manager Jane Hewin says: “The fundamental principle here is that we are here to cover risk. No one is talking about premium increases on the life side and we do not anticipate any staff redundancies.”

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