Terrorism rates are showing no signs of softening, despite market rumours to the contrary.

According to Talbot Underwriting hull and war underwriter James Skinner, technical differences in the way premiums are calculated have led to a perception that rates are falling.

The majority of insurers offer terrorism cover reinsured by Pool Re. Under Pool Re's rules, insurers calculate premiums based on a client's entire property portfolio.

A client cannot select a single property, such as a prestigious building in London, and leave other properties without cover.

Therefore, insurers which do not reinsure through Pool Re, such as Talbot, can be more flexible in how the cover operates as it can be provided for single locations.

Skinner said: "Our rates are higher than Pool Re, but as only one location is selected, the premium is lower than if the client insured through Pool Re.

However, regarding the potential softening of terrorism rates, Skinner concluded: "Rates are static at the moment and I can't see them lowering."