THE MIDEAST CRISIS: ASSESSING THE DAMAGE : Mideast Cargo Premiums Seen Rising Further : Insurance: Lloyd’s of London and other London firms push for rate hikes because of the increased risk in the Persian Gulf.

Shippers operating in and around the Persian Gulf are watching cargo insurance rates double, and premiums could rise further because of heightened tensions in the area.

According to new guidelines issued Tuesday by the London underwriting market, insurance for everything from wheat to ocean tankers could rise as much as fourfold in the near future. Moreover, those moving goods in or out of Iraq or Kuwait may find insurance scarce, if available at all.

Members of the market, including Lloyd’s of London and the London Institute of Underwriters, are suggesting higher rates because of the increased risk since Iraq’s invasion of Kuwait last Thursday.

Most insurers are expected to follow the new guidelines, published by the War Risk Rating Committee of the London market. Lloyd’s is the world’s largest single insurance market, and the London Institute is a lesser-known group of underwriters. War risk insurance is a specific type of policy for owners who want coverage in areas of international conflict.

The London underwriters posted an advisory rate for shipping out of Saudi Arabian ports at 10 cents per $100 of value of the goods, compared with 2.5 cents to 2.75 cents Monday. The advisory rate for the rest of the Persian Gulf is 5 cents, up from 2.5 cents, for each $100 of goods shipped.

The advisory rates are guidelines published by the London market that insurance companies use as a basis for their rates worldwide.

Insurance brokers also said the London market will recommend a ban on policies for those shipping to or from Iraq or Kuwait. The move is designed to bring the industry into compliance with the United Nation’s Security Council vote Monday calling for sanctions against Iraq, U.S. insurance brokers said.

They said the ban will be recommended in a bulletin to be published today by the London underwriters.

“The industry won’t cover any activity that will break U.N. policy on Iraq,” said a spokesperson for Alexander & Alexander Services Inc., a New York-based insurance brokerage firm.

U.S. insurers have already halted sales to those shipping goods to or from Iraq and Kuwait, according to a spokesman for the American Institute of Marine Underwriters, an industry trade group. The move was to comply with President Bush’s executive order issued last Friday.

The London bulletin published today is aimed at insurers in other countries.

Meanwhile, there has been a jump in the number of U.S. companies seeking political risk insurance coverage for dealings with Saudi Arabia and Turkey, two potential targets of Iraqi aggression.

Daniel Wagner, a broker with the international division of Johnson & Higgins Inc., said the current situation is a classic case of companies not recognizing their potential exposure until an incident occurs. Then they try to buy coverage as the situation explodes around them, he said.