16 leading insurance companies, including Munich Re, Swiss Re and Allianz, announced the foundation of “Extremus,” a jointly owned insurance vehicle which will provide excess coverage for losses caused by terrorism.
With headquarters in Cologne Extremus will insure German companies against the risks of losses caused by terrorism which exceed €25 million* up to €1.5 billion*. The German government has agreed to establish a fund to cover claims above that amount up to €10 billion.*
The new insurance pool is the product of negotiations between the government and the insurance industry on how to handle the risks to facilities such as skyscrapers and power plants that are particularly vulnerable to terrorist attacks, and is modeled on similar plans set up in the U.K. and France.
Extremus now needs to raise around €300 million in premiums order to cover its costs and begin operations.
* Editor’s Note:
The euro is currently trading at .9968 to the dollar, essentially at parity; therefore dollar and euro amounts are virtually the same.
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