The property insurance sector is facing one of its most trying times at the moment, which will call on all the skill of underwriters and a sector-wide focus on emerging new risks.

The World Trade Centre tragedy has affected the whole insurance industry, but commercial property is among those that will feel the punch the hardest. As one analyst said recently: "Premiums have been rising for the past 18 months and it's an inevitable result of the New York attacks that premiums will rise further."

This sector was already lacking adequate insurance cover according to research this year from Zurich's commercial unit. It found that less than half of those interviewed had insurance and risk management programmes that addressed all their risks.

The collapse of Independent Insurance has not helped matters either, with reports that it has driven capacity out the market. And all this is against the backdrop of the storm and flooding problem.

Storm and flood damage cost the industry more than £700m last year and experts are predicting that the number of flood incidents and associated costs will increase this year.

This is a critical period for insurers. Reserves have already taken a battering and it is debatable how much more insurers and reinsurers will take. Underwriters are under greater pressure to get things right, but the buck shouldn't start and end with the insurance industry. The government has to take some responsibility and greater investment in flood defences in now vital.

Alison Boyle
Managing Editor