(by Ameli Berksman)

Due to Marsh Inc. survey the number of companies buying terrorism coverage lifted in the second quarter of 2004. Most of them were the companies with total insured property between $500 million and $1 billion.

Marsh has surveyed 807 companies, where 46.2% bought terrorism coverage within renewing property programs during the second quarter, it is slightly more than 44.2% in the first quarter and nearly double more than 23.5% in the second quarter of 2003.

Against the companies with total insured value between $500 million and $1 billion with their 67.9% of terrorism coverage in the second quarter, only 44.2% of the companies with over $1 billion in value have bought it in the second quarter.

The biggest buyers appeared to be public entities and real estate companies (70.0% and 69.2% respectively); the smallest ones were energy companies (17.9% only).

Despite of the fact that average terrorism rates dropped in the second quarter to 0.0076% (as compared with 0.0080% in the first quarter), terrorism coverage pricing remains higher than overall property insurance pricing, Marsh notes.