AIG forced to hike premiums for soldiers in war zones
Armed forces accident and sickness underwriter AIG has hiked premiums by 70% in two years because of high casualties in Iraq and Afghanistan according to The FT.
But despite last year’s 30% increase, sales rose 8% to 68,000, according to AIG.
The insurance, which covers troops at home and in war zones and, where chosen, their families, pays out anything from £10,000 to £150,000 in the event of death and up to £750,000 for total paralysis. The money comes on top of payments under the armed forces compensation scheme.
Nicola Wilton, senior vice- president for AIG UK, said claims had doubled since 2004. "The scheme has been loss-making for the past five years," she said, and any insurance product, in the long run, "has to balance claims and premiums".
"The number of troops on operations and the frequency of their deployment" had been a key factor in rising claims and hence the need to increase premiums, Ms Wilton said.
Casualties in Iraq, where 178 troops have died and 315 have been wounded in action, have been declining. But Ministry of Defence -figures show casualties rising sharply in Afghanistan where 143 have died, 51 of them last year, along with another 235 wounded in action in 2008.
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