Trenwick and the Co-operative Insurance Society will be asked to renegotiate existing policies to prevent Argentinian insurers from going out of business.

Argentinian insurers have struggled since their currency collapsed last December. As the peso is down by about 70%, insurers are paying three times the amount of premium and are receiving three times more cover than they need.

The International Cooperative and Mutual Insurance Federation (ICMIF), which has acted as the international placing broker for Argentinian companies since 1992, is now trying to cut premiums by a third for its 14 members, writing mainly motor business and small commercial risks.

In the next few weeks it will ask Trenwick and the Co-operative Insurance Society, plus other organisations including Hannover Re, Scor, Trygg-Baltica International, The Co-operators of Canada and Unipol, to renegotiate polices to take effect retrospectively from 1 January 2002 instead of on the traditional renewal date of 1 July.

The policies would be valid for 18 months until 30 June 2003 but Argentinian insurers would not be allowed to make any claims for the first four months of this year.

ICMIF senior vice president of reinsurance Lars Erik Lundqvist said: "We need to redesign the reinsurance programme to match the needs of Argentinian insurance companies, otherwise some will go out of business. It would be too much of a burden as they are paying three times as much premium for cover they do not need."