The Association for Risk Management and Company Insurances (AMRAE) has accused insurance companies of using the market's shock following the World Trade Centre attacks to increase rates unreasonably.
The French risk management association attacked insurance companies at the Federation of European Risk Management Associations (Ferma) forum this week.
An AMRAE statement said companies were willing to accept rate increases following the terrorist attacks, but said the insurance companies' panicked response to the disaster had worsened already negative market trends.
"We noticed that insurance companies almost immediately announced cancellations, substantial increases of premiums and deductibles, and reductions of capacity and even cancelled insurance cover to worsen a trend that started at the beginning of the year," it said.
"The rapid implementation of these decisions and the lack of a long-term perspective in a more and more restricted market are placing companies in a position of weakness in the face of the concerted action of insurance companies that blow hot and cold."
The statement accused insurance companies of increasing rates in an "undifferentiated manner" that did not take into account successful and long-term programmes that had been in place for years.
It said all companies would have "enormous difficulties" absorbing the sudden increase in rates, with some being forced into bankruptcy.
Instead, it called on governments to provide tax-exemptions for companies that chose to self-insure.
"Confronted with the unacceptable contraints that insurance and reinsurance companies want to impose, we should consider alternative markets at the European level that could, in the long term, lead to a formation and an entity that would fund company-specific risks," it said.