Covering summer games in Athens proves an Olympian task for insurers.

The rapid approach of the 2004 Olympics is giving added meaning to the word "risk."

Athens, this year's host city and the site of the original Olympics, will be staging a modern Games against an ancient backdrop that's among the world's most impressive. Since the attacks on the United States in September 2001, high-profile events such as the Olympics automatically have been considered potential targets for terrorism.

Mike Sibthorpe, divisional underwriting director for accident and financial at Brit Insurance Ltd., said the Olympics potentially cut across a number of lines in the organization's very wide portfolio. This spread puts pressure on underwriters to handle information efficiently. "It's not just the individual risks," Sibthorpe said, "it's the aggregation of those."

Sibthorpe noted that Brit regularly runs realistic disaster scenarios to maintain a grasp of its potential exposures. "And when you run the realistic disaster scenario for the Olympics," he said, "you can have some fairly major numbers there."

David Knight, contingency underwriter for accident and financial at Brit, said that terrorism is an obvious exclusion from Olympic coverage. He noted that this coverage can be included for additional premiums, and only after a very careful assessment of the risk.

Given London's specialist expertise, some of the risk connected with the Olympics will inevitably be written in the United Kingdom. Underwriters in London generally are reluctant to offer estimates of the total market or their own participation in it. David W. Bruce, a principal at Hiscox Syndicate 33 at Lloyd's, estimates however, that the total of Olympics-related cover will be about $1 billion.

David Foreman, chief underwriting officer at Wellington Underwriting plc's syndicate 2020 at Lloyd's, said that no physical infrastructure business--his specialty--has come his way. Foreman said he suspects the Greek market is absorbing that risk before reinsuring it into the facultative market.

The rates for basic coverage for the Olympics, excluding terrorism, are "fairly static"--almost unchanged over the past few years, said Gordon Doering, senior underwriter for facultative casualty/contingency lines for reinsurer Hannover Re Group. "The inclusion of terrorism cover will increase the premium, but this is only logical as the exposure will increase substantially also," he said.

Doering said that, for the Olympics, various classes of insurance and reinsurance would be purchased--traditionally property/casualty, personal accident, marine and contingency coverages. "We wouldn't say that the Olympic Games differ very much from any other big sporting event--for example, the Euro 2004 (soccer) finals in Portugal," scheduled for June 12-July 4, he said. "However, in the current climate, security and the threat of terrorism are important issues."

Athens would appear to be more vulnerable to terrorist attack than many locations. Greece is relatively close to Middle East trouble spots, and its many, scattered islands offer easy access to infiltrators.

A shortage of hotel space in the Greek capital means that many participants in the Olympics will be housed in luxury ocean liners tied up in the nearby port of Piraeus. Not only would these ships be relatively easy to attack, underwriters fear, but they also represent very high potential losses.

Those vessels are insured in the commercial market for war risks, including terrorism, but with exclusions for nuclear, biological or chemical attack. Coverage is granted up to the full hull value for physical damage losses, and in most cases for war protection and indemnity coverage. Such coverage was available in the general marketplace--mostly Lloyd's--with one exception.

"To our knowledge, it was not possible to fully place the $800 million of war coverage required on the Queen Mary 2--the world's biggest and most expensive cruise vessel," said Sven Althoff, marine/aviation managing director for Hannover Re. "She is clearly the top exposure among the various vessels on charter; the next highest value, to our knowledge, is $425 million."