FIFA seals new insurance deal for World Cup

World governing body FIFA has sealed a new insurance deal for next year's World Cup finals, after main insurers AXA cancelled its existing policy following the September 11 attacks on the United States.

FIFA said its new "cancellation insurance" contract with the National Indemnity Company, owned by the Berkshire Hathaway Insurance Group of the United States, was for a policy which could not be terminated by the insurer.

The governing body also said it had started legal action against AXA, who asked for their 1.4 billion Swiss franc ($852 million) deal to be renegotiated due to increased risk following September's attacks and the subsequent U.S.-led strikes on Afghanistan.

"The completion of a new cancellation insurance deal was necessitated when FIFA's previous insurer AXA gave notice that it would withdraw its cover on November 11, although FIFA claimed there were no valid grounds for this move," FIFA said in a statement.

AXA declined to comment on Monday. The French insurers said earlier this month they had expected to reach a new agreement on cover for the finals, which take place in Japan and South Korea in May and June next year.

"I'm delighted that in just a few days FIFA has managed to seal a new contract and that we can count on a strong insurance partner in an emergency," said FIFA President Sepp Blatter in a statement on Monday.

Several sporting events have been hit by security concerns since the attacks. Economic uncertainty has also squeezed sponsors.

The total cost to the world insurance industry for the attacks has been estimated at more than $30 billion.

AXA itself has so far put its exposure to related claims at $550 million.

CANCELLATION INSURANCE

A FIFA spokesman said no details of the new premium or whether the new arrangement included cover against terrorism would be released at the moment.

FIFA said earlier this month it had not reneged on any contractual obligations with AXA and all payments had been made on time.

Its World Cup premiums totalled 27.4 million Swiss francs, paid in instalments leading up to the event.

Japanese World Cup organisers (JAWOC) have promised to implement tougher security measures, including the use of metal detectors and X-ray equipment to check bags at the entrances of Japan's 10 World Cup stadia.

Japan is also increasing its security budget by 25 percent to $18.5 million.

The 32-team tournament takes place from May 31 to June 30.