The terrorism insurance market could be at risk from terrorist losses, according to a report by the Organization for Economic Cooperation & Development (OECD).
The Paris-based OECD's Insurance and Private Pensions Committee in 2002 set up a task force of government and industry experts to analyse the financial management of terrorism risk.
It found the maximum losses resulting from a single terrorism attack range from $50bn to $250bn.
It said the insurance industry may not be able to cover large-scale losses and that government intervention might be necessary to maintain cover at an affordable rate.
The report also noted that the existence of public-private partnerships to cover terrorism events could help to stabilise terrorism insurance markets after a large-scale attack or frequent attacks.
It advised governments to work with the insurance industry to try to find ways to cover terrorist risks.
