The US government's terrorism insurance backstop could fail because businesses are rejecting cover offered under the scheme.
The federal safety net forces those insurers that removed terrorism coverage from their policies after September 11 to reinstate it.
However several high-risk groups, particularly in the property sector, have recently rejected policies under the scheme because quotes were too expensive.
Banc of America Securities' analyst Lee Schalop said: "Most of the companies we cover would say that the premiums they were going to be charged under the mechanism in the terrorism insurance act were unreasonable.
"The way this thing was set up, that insurers have to offer terrorism insurance but can charge whatever they want, is not the answer."
However, insurers claim that despite government assurances that it would minimise their losses in case of attack, they are concerned over whether they can collect enough premiums to sustain coverage.
AIG chief Hank Greenberg said few of its policyholders were taking up the scheme. He said: "The only ones who are . . are those companies or properties that are high profile and that's true for the whole industry."
