LAHORE, Oct 12: Local insurance companies are facing the heat of the Sept 11 terrorist attacks on New York and Washington as their business in import and export sector is registering a serious decline.

Officials of one of the leading insurance companies in the country said their clients who were dispatching at least one consignment per week earlier, could not send a single consignment to Europe or America during the last one month.

Buyers in the US and Europe were unsure about the continuity of the supplies from Pakistan so they decided to cancel their orders until normalcy restored to the region, they said.

Moreover, the raise in the insurance rate increased charges of the consignments making them costlier in the world market and resultantly cancelling of orders, they added.

This resulted in 50 per cent to 80 per cent fall in the local insurance business, they said.

The officials claimed that the re-insurers had increased their rate almost 10 to 20 fold but the local companies had not passed on all this load to their clients. The local insurers had increased their rate from 3.75 to 5 paisas only, they added.

The only import/export category unaffected by the current situation was pharmaceutical, they said.

The local firms were now shifting their focus towards underwriting of vehicles and factories and were lowering their rates in a race to attract more and more clients to cover their losses in import/export business, they said. While the announcement by the PIA management to give its insurance business to local firms, after an exorbitant hike in the rates of the world firms, had created enthusiasm among the local insurers and they were making preparations to capture the opportunity.

They said the Pakistan government had urged the international insurance firms not to levy war risk surcharges on cargoes as ship owners were reluctant to charter vessels since the US launched strikes on Afghanistan.

More and more ship owners were insisting higher war risk insurance cover as the government officials were holding talks with some insurance firms offering guarantees for their vessels, they said.

Last week, three international shipping lines, Korean lines Hyundai Merchant Marine Co Ltd and Wanhai Line, together with Hong Kong-based Orient Overseas Container Lines (OOCL) suspended operations to assess war risk insurance charges. But, on Wednesday, they decided to resume Pakistan operations.

The government officials were trying to issue a notice in newspapers that it was safe to come here, they said.