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pounds 411m cost after Manchester bomb sets record pounds 411m

Kim Sengupta
Friday 28 March 1997 00:02 GMT
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The IRA bombing of Manchester's shopping centre last year cost insurance companies pounds 411m in compensation, making it the most expensive man-made disaster ever, writes Kim Sengupta.

The huge cost of rebuilding parts of the Arndale Centre was disclosed in a report by the Swiss Reinsurance Company this week as the Provisionals renewed their terrorist campaign at Wilmslow railway station in Cheshire.

More than 400 businesses in a half-mile radius of Manchester city centre were affected by the blast on 15 June. Many more outside this area suffered smashed windows and damaged fittings.

A previous major IRA bombing, last February l996, in Docklands, east London, is estimated by insurance adjusters to have cost around pounds 170m.

Security sources have long warned that the IRA is switching its attention to economic targets. After the 1992 Baltic Exchange bombing in the City, several international finance companies threatened to move their operation to the Continent, which led to a dramatic upgrading of security in the area.

The Manchester bombing highlighted the insurance problems faced by businesses. Up to one-third of the companies affected by the explosion are believed to have received limited compensation because they did not have the cover needed in the event of a terrorist attack.

A government-backed reinsurer, Pool Re, was set up after the Baltic Exchange bomb; extra premiums are collected by United Kingdom insurers and passed on to Pool Re, which then meets the claim. Without this cover, compensation for a terrorist attack is limited to a maximum of pounds 100,000 per claim for structural damage.

According to the Swiss Re study, the Channel tunnel fire at the end of last year was the third most expensive man-made disaster - insurance companies paid out a total of pounds 228m.

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