Series Title | European Voice |
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Series Details | 27/09/01, Volume 7, Number 35 |
Publication Date | 27/09/2001 |
Content Type | News |
Date: 27/09/01 By INSURANCE companies are preparing to defend themselves against charges that they colluded to increase airlines' premiums and slash cover in the aftermath of the terrorist attacks on the US. The European Commission is examining how airlines around the world were given one week's notice of changes to their policies in an apparently co-ordinated response to the tragedy. The European Insurance Committee (CEA), which represents the insurance industry, plans to meet EU single market and competition officials in the coming days to explain how the changes were organised. “Everybody acted in the same way because they were acting for the same reasons,” a CEA source insisted. However, the Commission is understood to be studying the similarities between communications sent by insurers and agents, notifying airlines of the policy changes. Article 81 of the EU Treaty prohibits agreements between companies to fix prices or otherwise restrict competition. Amelia Torres, spokeswoman for Competition Commissioner Mario Monti, said “several European airlines” had been asked for information, although she said no official complaints had been received. Enquiries are likely to focus on the handful of reinsurance firms who take on much of the risk from insurers and spread it across markets. “At the end you have a few people involved as far as funding is concerned,” the same industry source said. The world's two largest reinsurers, Munich Re and Swiss Re, last week doubled their estimated losses resulting from the 11 September attacks to a combined €3.4 billion, prompting share prices to plummet. Finance ministers meeting in Liège last weekend agreed to offer emergency insurance guarantees to airlines tafter warnings that flights could be grounded by the reduction in third-party war risk cover to €54 million - well below the levels demanded by most international airports. At the same time, insurers announced more than ten-fold increases to premiums for war risk - which includes cover for damage on the ground resulting from any terrorist act. “It would of course be rather interesting to know if there had been any kind of concerted approach, or whether they all happened to agree on the same amount at the same time,” said Owe Löwenborg, head of government affairs at Scandinavian airline SAS. He added that his company had not complained to the EU executive over the changes to insurance cover. A consortium of global insurance companies said on Tuesday (25 September) that it had finalised a deal to reinstate war risk cover of up to €1.1 billion per airline. |
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Subject Categories | Business and Industry, Internal Markets, Mobility and Transport |
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