A specialist terrorism insurer set up by six big insurance and reinsurance groups last April has been forced to shut its doors because people weren’t prepared to pay its prices.

Special Risk Insurance and Reinsurance was developed by Allianz, Hannover Re, Scor, Swiss Re, XL Capital and Zurich in an attempt to fill the gap left after September 11 to take advantage of the beseiged terrorism insurance market.

New – and cheaper – government terror insurance schemes and changing terms and conditions were two of the major reasons for the declining interest in their product. The risk group only issued about 80 policies during its short life.