War in Iraq will have little impact on the insurance industry, according to Munich Re and other leading insurers.
The forecast came as President Bush gave Saddam Hussein a 48-hour deadline to leave Iraq, or face military action.
A spokeswoman for the world's largest reinsurer told Reuters: "The impact of a war will certainly be very limited, because war is not an insurable risk in most lines of insurance."
Insurers are understood to have no significant business in Iraq, since governments cover armed forces, and commercial insurers have war exclusions on property policies.
In addition marine insurers expect to be immune from large war damage claims, according to Bob Hartwig, chief economist at the U.S. Insurance Information Institute.
AIG chief executive, Maurice Greenberg suggested last month that there will be opportunities for insurers following any US-led war.
He said: "When you destroy something you have to rebuild it," he told analysts on a conference call. "When you rebuild it, you have to insure it."
But insurers fret that a long war would prolong an economic recovery, drag down investments, and provoke terror attacks.
However Standard & Poor's has raised fears that recent successes in raising premium rates could be spurned. S&P analyst Bob Partridge said: "A war could seriously limit the length of the recovery for rates. If the economy suffers, people just won't be able to pay the rates."
