German insurer Allianz AG has revealed that it faces costs of between $1.2 million and $10.7 million following the devastating bombing of London. Most other major insurers in the UK are likely to face a similar situation.
Allianz is potentially liable for as much as a double digit million dollar payout because it is a member of a UK government insurance scheme set up 12 years ago to insure against attacks from the Irish Republican Army.
Alongside Allianz many of the other leading insurance providers operating in the UK will also be members of the state run scheme and will therefore also be facing multi million dollar exposures.
Under the terrorist attack insurance cover, the total value of liability for Allianz and the other insurers involved will be a collective GBP75 million if the London bombing is considered a single event. This figure would double to GBP150 million if the devastating occurrences are deemed as a series of separate events.
Shares in Prudential plc, Aviva, Axa and Allianz all fell between two and three percent on the day of the bombing.