All groups in the insurance industry must discuss and co-operate over the problems stemming from the hard market.

Association of Insurance and Risk Managers (Airmic) chairman Philip Thomas said the difficulties in the market included increasingly expensive insurance cover and reduced capacity.

Thomas said risk managers should meet all insurance industry groups regularly to "enable free discussion about matters of potential or existing concern".

Speaking at the Airmic annual dinner last week, he said: "The lack of insurance cover against terrorism is still a huge issue throughout our industry.

"Clearly it is vital that such cover is available and Airmic is working closely with its members and the Association of British Insurers (ABI) and making representations to government to help resolve it.

"Other forms of cover have disappeared at such an alarming rate that many in risk management are dangerously exposed."