Cox Insurance has increased its estimate of losses from the World Trade Centre attacks to a possible £125m.
The Lloyd's insurer said in September 2001 that it expected the terrorist attacks to cost it £30m.
It increased its estimate on 25 October 2001 to £67m.
It said in a statement today: "Cox Insurance has continued to monitor the situation carefully and believes it is now prudent to provide an update on its position.
"The current total loss notifications have increased to approximately £85m (net of reinsurance and including the balancing effect of reinstatements, pre-tax)."
Taking into account possible mitigating payments, the company now expected the pre-tax losses to "ultimately fall within a range of £75m - £125m".
The figures assume the company will receive full settlements from its reinsurers.
The company's stock was hit hard by Tuesday's announcement, plummeting 12% by mid-morning to 120p.
