Terrorism fund to help businesses

Parisian businesses struggling after the November 13 attacks are likely to be able to make successful insurance claims, helped by a state-backed fund set up in the wake of the Sept. 11 2001 attacks in New York.

The recent Paris attack could spur demand for insurance against terrorism, as French hotels, department stores, and sports and concert venues face cancellations and fewer customers.

Those shops and restaurants in the areas cordoned off by police for investigations are expected to be affected the most.

However, the Gareat co-reinsurance pool, set up in 2002, which is provided with unlimited state-guaranteed cover through the CCR (Caisse Centrale de Reassurance) fund, will help insurers pay claims from businesses, according to a Reuters report.

This pool structure, pioneered by Britain's Pool Re in 1993 and common in developed markets, acts as a reinsurer, sharing the insurers' burden in protecting business against terrorism. This makes terrorism insurance more affordable for businesses.

Insurers will be liable for the first 400 million euros of all claims combined, Gareat will pay out on claims between 400 million and 2.4 billion, with the French government taking up the rest via the CCR fund, according to 2015 data.

The Gareat members are French or foreign insurance companies which issue property damage policies covering risks in France, including terrorism.