Iraq insurance premiums double
Cost of doing business soars
CNN's Diana Muriel
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 Eight employees of a Russian company in Iraq go free unharmed.
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(CNN) -- Increasing threats of targeted attacks and hostage-taking is complicating the work of contractors working on reconstruction in Iraq. The dangers have forced a change of tactics in order to avoid becoming targets.
But for many the increased risk is too much -- as insurance premiums soar for international contractors, many are pulling out.
The recent wave of kidnappings in Iraq has sent shock waves around the world. But the murder of an Italian hostage -- although a tragedy -- was not entirely unexpected.
Anne Williams of London insurance brokers Heath Lambert told CNN: "I don't think it changes things significantly now because it has been in the last two weeks that everything has escalated there and rates increased to reflect this potential ... this type of thing actually happening.
"Depending on what happens in the future rates may increase but I don't see them increasing in the next 48 hours."
In fact insurance premiums for the thousands of civilian contractors working in Iraq -- and the international contingent of journalists covering developments there -- have doubled in a fortnight.
"In comparison to buying a straightforward personal accident policy here in the UK the rates that are being charged for somebody going to Iraq would be 20 times at least what you would pay for a standard person based in the UK," Williams said.
Experts say security and insurance costs now represent half the total cost of doing business in Iraq for international firms. That is if they are able to continue doing business at all.
Mike Redman, intelligence analyst for British security form AKE, said: "It's meant mainly for expatriate personnel working in Iraq that we've seen a situation of 'lock-down' in certain places where the risks present to the personnel are just too great to operate.
"It's meant convoys travelling betwen major cities and, for instance, between the international airport and Baghdad, the risks are just too great."
For many the cost of staying in Iraq is too high.
Many governments including Germany and France have urged their citizens to leave.
The Russian government has sent aircraft to evacuate up to 816 Russian and other former Soviet states' citizens who remain there.
These departures worry some Iraqis.
Local resident Haitham Abdul-Razzaq told CNN: "We want them to remain in Iraq. We support them as long as they are working in the interest of Iraq, to rebuild the country and its infrastructure.
"We advise the Russians to stay. They are serving Iraq and we want them to remain."
But withdrawal from Iraq is a key demand of the kidnappers. Three Japanese civilians captured earlier this month have been threatened with death if Japanese troops are not pulled out.
For their part Japanese soldiers are continuing their reconstruction work -- such as delivering new school supplies in the southeast of the country.
But the risks for civilians in Iraq have never been greater. Experts say their ability to work is bound to be the first casualty of the deteriorating situation.
