Lloyd's of London, the world's biggest insurer, said today it had substantial exposure to US airlines whose planes were hijacked on Tuesday and the World Trade Center whose twin towers were razed when the aircraft hit.
Chairman Mr Sax Riley said it was too soon to quantify total losses for Lloyd's but indications would soon begin to trickle through. The insurance market, whose members have underwritten policies for three centuries, were assessing the costs.
An aviation insurance expert predicted that some of Lloyd's' 108 syndicates, or groups of underwriters, could crumble under the weight of the US claims and be forced to stop writing new business.
The expert, an industry consultant, said the catastrophe, in which aircraft ploughed into the World Trade Center and the Pentagon in Washington, exceeded even the scariest scenarios Lloyd's underwriters have to build into their forecasts.
Lloyd's is just recovering from massive losses in the 1980s and 1990s when many members, or names, were bankrupted by claims stemming from floods, an oil rig explosion and diseases linked to asbestos.
Lloyd's syndicates were hard hit when insurers paid out $510 million after the World Trade Center was bombed in 1993.
Experts say the insurance industry worldwide could face a bill of $10-15 billion as a result of the attacks. Lloyd's, prominent in the war and hijacking sectors, may have to foot a large part of the cover.
The losses are likely to be shared between the insurance companies and the reinsurers, including Munich Re and Swiss Re.
"There isn't a single insurance company you could name of any consequence who would walk free from this," said the insurance expert.
CGNU, Britain's biggest insurer, said today its total net liability from the US attacks, after taking into account reinsurance arrangements, was not expected to exceed £35 million sterling.