Air Transport World

Gulf crisis spurs rise in war-insurance rates.

Airlines operating into and out of the Middle East have seen hull and liability war-risk insurance premiums increase dramatically in the wake of the Iraqi invasion and occupation of Kuwait and the subsequent U.S.led military and economic response. The extremely high cost of insurance and the conditions being placed upon operators by underwriters have caused some airlines to reduce service to the region and to suspend intermediate stops on flights to and from the Asia/Pacific region.

According to IATA, airlines are paying more than $20 million per week in higher premiums. IATA Director General Gunter Eser says that carriers believe the rates are higher than they need be.

But insurers are likely to turn a deaf ear to such complaints, because they already face exposure to claims totaling $690 million resulting from iraq's seizure and removal to Baghdad of the Kuwait Airways fleet. …

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