Lloyd's Prepares for War

Lloyd's of London, the world's largest group of insurance underwriters, said yesterday it was preparing for a war in the Persian Gulf and predicted rates that have already climbed substantially would jump even more.

Lloyd's officials said the group was girding to stay open an unprecedented seven days a week to handle claims and policy business, particularly concerning war-related risks.

David Larner, a spokesman for Lloyd's, said, "I imagine anybody who hasn't got war cover insurance now is about to get it."

Higher insurance rates can ultimately mean higher air fares and other prices for consumers.

Lloyd's said its total exposure in the gulf is not known.

It already has paid a claim of $225 million for Kuwait's national airline because much of its assets were seized by Iraq.

Kuwait Airways Still Flying The skies over Kuwait are far from friendly these days, but that hasn't stopped Kuwait Airways.

"Until we're able to welcome you to Kuwait, welcome aboard," says a poster for the airline, advertising stops from New York to Bombay.

Using the eight jets of its 23-plane fleet that escaped Iraq's occupation of its country, Kuwait Airways now runs three flights a week from New York to London.

It goes on from there to the Middle East and Bombay, India, as well as on its old routes around the Persian Gulf.

The first Kuwait Airways flight from London landed at New York's Kennedy International Airport on Dec. 11. The airline was also able to revive its flights around the Persian Gulf in October -- three months after Iraq seized Kuwait.

Companies Cut Travel

A number of large corporations said yesterday they have banned or sharply restricted employee travel to most destinations outside the United States because of the chance of war in the Persian Gulf.

The sweeping restrictions, ranging from one week to indefinite durations, were meant to protect workers from terrorist attacks or other Middle East-related violence.

Restrictions imposed by Ford Motor Co., Chrysler Corp., Minnesota Mining & Manufacturing Co. and other major corporations could deal yet another blow to the troubled U.S. airline industry.

3M, in addition to restricting new trips, said it was ordering all employees currently traveling in foreign countries to return home immediately, including U.S.-based employees in Europe and European employees in the United States.

The Maplewood, Minn.-based company told its 87,000 worldwide employees that all corporate travel between the United States and Europe was being banned indefinitely.

A Ford spokesman said that starting Monday, one day before the Jan. 15 deadline, its 150,000 U.S. employees were barred from traveling to any countries except Canada and Mexico until Jan. 20.

Effective Wednesday, the day of the failed U.S.-Iraq talks, Chrysler Corp. indefinitely "pulled the plug on international travel" to all destinations except Canada and Mexico, said a spokesman.

Air France Raises Fares

Air France raised the price of a one-way ticket between Paris and 11 Middle East destinations by $200, effective today, a spokesman confirmed yesterday.

Destinations affected by the increase include Cairo; Tel Aviv, Israel; Riyadh, Saudi Arabia; Damascus, Syria; and Amman, Jordan, the spokesman said.

An Air France spokesman said the fares were increased to cover the higher insurance premiums airlines that operate in the region are being asked to pay because of the threat of war in the Persian Gulf.

On Wednesday, Pan Am extended for at least one more week a suspension of its flights to Tel Aviv and Riyadh because of huge war-risk insurance surcharges.