Six major insurers have launched a specialist property terrorism pool.
Zurich Financial Services, XL Capital Ltd, Swiss Re, SCOR, Hannover Re and Allianz have set up the company, called Special Risk Insurance and Reinsurance (SRIR).
The Luxembourg-based operation has been set up with Euros 500m.
SCOR holds a stake of 9.1% while the other partners hold 18.2% each.
It will work independently of the founding companies with separate underwriters.
It was set up in response to a worldwide shortage of commercial terrorism cover following the 11 September attacks.
The company will cover only property damage and will exclude business interruption.
To limit its exposure and prevent clusters of properties which could be vulnerable to a single explosion or attack, policies will limit cover to Euros 275m for anything within 600 metres of a covered property.
Other insurers have criticised the founding companies for entering the market for terrorism cover, arguing that governments should fill the role.
A statement from SRIR said: "The establishment of SRIR signals the confidence of the investors in the development of workable private solutions to the provision of terrorism cover. However, private solutions remain complementary to state sponsored schemes established prior to and since September 11, 2001 and are not meant to replace them."
The business will be sold through brokers, banks and direct. Underwriting could start in the second quarter of the year if the company wins regulatory approval.
