Lloyd's underwriter Cassidy Davis saw a 700% increase in the number of quotes written for keyman insurance after the US terrorist attacks on September 11.

Keyman insurance is a term life policy bought by a company to cover its financial exposure to the death of a key employee.

The St Paul subsidiary said the demand for keyman quotes had now tapered off, but remained at roughly double the level it was prior to the attacks.

Cassidy Davis life underwriter Kevin Tugwell said since the attacks the basic policy had not changed and rates charged on policies had stayed much the same.

"However, we are assessing more carefully those individuals engaging in a high degree of travel," he said. "In these cases, we are removing the cover for travel exposure from the policy, reassessing the risk and writing the cover back into the policy at the appropriate rates."

He added the reason for that approach was to avoid penalising all policyholders with an increase in rates across the board.

"The premium for war risks cover has, as you would expect, risen," he said.

Cassidy said he considered areas of low risk to be Western Europe, Australia, New Zealand and Japan. According to Tugwell, any country where anti-US feelings have been expressed are much higher on the exposure list, but the situation is being reviewed daily.

Keyman insurance provides funding to cover costs such as recruitment of a replacement and maintenance of loan repayments affected by a drop in company profitability. Other benefits include investment protection, where an increase in working capital is lost due to a key employee's death, and funding to buy the shares of a deceased partner or director.