UK terrorism rates have bucked the global trend by remaining static over the past four years.

Global rates in the stand-alone terrorism market have almost halved since 2001, falling by between 40% and 50%, according to Aon's crisis management division.

The fall has been attributed to capacity growth, a favourable claims-to-premium ratio and increased competition.

But, Geoffrey Stilwell, managing director of Beech Underwriting, a specialist in terrorism risks, said: "Rates in the UK haven't really changed in the past four years. The only change is where you differentiate between residential and commercial risk. But Pool Re [the government- backed terrorism facility which does not distinguish between the two] is using the same rates today as it was in 2001/2002.

Since the events of 11 September 2001, Aon said the terrorism market had matured "greatly" with capacity now at $1.3bn.

David James, terrorist underwriter at Ascot added: "Buyers now have more choice and benefit from a more mature marketplace.

"The great news from a London and Lloyd's perspective is that terrorism insurance is really focused around the London market, which remains at the core of what drives terrorism placement today. A developed market enables underwriters to respond better to what the client wants."

While the US remains the biggest market, the demand for terrorism risk is said to be growing in other parts of the world.

Stephen Ashwell, terrorism underwriter at Hiscox, believes in the future the market will be affected by an increase in incidents across the world, greater threat awareness and other insurance losses such as another round of wind storm losses in 2006.