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Flight Insurance Boom Expected : Terrorism Boosts Security Business

June 25, 1985|Associated Press

NEW YORK — Companies that specialize in security say the hijacking of TWA Flight 847 has boosted a business that had been growing rapidly anyway because of increasing fear of terrorism.

"What with hijackings and the shooting in El Salvador, it has been a busy week for us," said Philip Rosen, vice president of Law Enforcement Associates Inc. of Secaucus, N.J.

Rosen said last week that two international airlines in Europe, which he declined to identify, have placed orders for metal detectors.

"We expect to do a lot more business in the immediate future," he said.

Companies that offer flight insurance also expect a jump in business.

Tom O'Connor of Mutual of Omaha Insurance said hijack victims could collect under two types of policies--trip interruption-cancellation insurance, which pays off whenever a flight is canceled or interrupted, or accident insurance coverage, which pays for death or medical treatment for injuries suffered aboard an aircraft.

No Dramatic Increse

Alan Fletcher of Travelers Insurance of Hartford, Conn., one of two major flight insurers, said Friday that there had been no dramatic increase in the number of policies sold, "but we sure expect a considerable increase as a result of the current hijacking."

However, the hijacking only heightened concern that was already widespread.

There were 391 acts of international terrorism in 1984, causing 251 deaths, according to the Rand Corp. in Santa Monica.

That was a slight decrease from the previous year, when there were 400 incidents and a record 699 deaths, said Bonnie Cordez, a Rand researcher in security and terrorism.

In the United States, Rand counted 50 terrorist attacks with two deaths in 1984, down from 59 incidents and 12 deaths in 1983, Cordez said.

Despite that drop, government agencies and large corporations have stepped up their security, installing such devices as bomb detectors and a hydraulically powered steel wedge that pops up from street level to barricade driveways, said Kerry Lydon, an editor of Security World, a trade magazine.

Sales and earnings figures of the nation's 50 major security companies are not available because most are privately held, but their business grew 20% to 25% in 1984 from the previous year, Lydon said.

$22 Million in Sales Seen

Law Enforcement Associates, for instance, sold $18 million worth of equipment in 1984, up from $12 million in 1983. It expects to boost its sales to $22 million this year, Rosen said.

Rosen said that his company sold more than $1 million worth of equipment to the Lebanese government last year, mainly bomb detectors, but that trade has been suspended during the recent fighting between Shia militias and Palestinians.

Security Associates reports that it has large contracts with the General Services Administration to supply anti-terrorist equipment for government agencies and embassies. Other customers include the governments of Nigeria, Saudi Arabia, El Salvador and China, Rosen said.

Checks for Explosives

He said one of his best sellers is a mirror mounted on a rod, designed to look for explosives under a car or truck. It's been selling well, he said, since suicide commandos drove bomb-laden trucks into U.S. and French military compounds in Beirut in 1983, killing 241 U.S. servicemen and 58 French troops.

Another popular item is "road fangs," a portable device that stretches 21 feet across a road and stops a car or truck with a push of a button by puncturing the tires. Buyers included law enforcement offices, oil refineries in the Middle East and nuclear facilities in the United States, Rosen said.

Basix Control Systems in Carson, which produces access control systems using card identification devices, has been growing steadily for six years, Vice President Mario Marinaccio said. He declined to disclose sales in 1984 but said they were up 23% from a year earlier.

Lenco Industries of Pittsfield, Mass., had quadrupled its business since the company was formed four years ago to convert ordinary cars and vans into armored vehicles by adding bullet-resistant materials, said Len Light, Lenco's president.

The company also produces armored trucks strong enough to withstand attacks by machine guns and small rockets, he said.

Wackenhut Corp. of Coral Gables, Fla., which provides bodyguards and other security services in the United States and 27 other countries, said its executive protection division increased its clients 25% in 1984. Revenue was up 16%, said Matt Kenny, director of corporate communications.

Wackenhut also provides security guards for such high-risk installations as the trans-Alaska pipelines, major airports both in the United States and abroad, dams and the nuclear test site in Nevada.

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