MUMBAI - DESPITE the deaths of 163 people in militant attacks on India's commercial capital, residents remain fatalistic and are shying away from terrorism insurance, workers in the industry said.

But reluctance by the public to accept that anyone can be affected by extremism hasn't stopped Indian insurance companies coming up with new products and services for those not willing simply to rely on providence.

As Mumbai newspapers reported the first life insurance payout following the deadly attacks in Mumbai last week, Indian insurers are offering clients policies specifically linked to the type of violence that turned the city into a warzone.

Ten heavily-armed militants arrived in Mumbai by boat and stormed a dozen locations, taking hostages at two luxury hotels and a Jewish prayer centre in a strike that lasted 60 hours.

City officials put the death toll at 172, including nine of the militants and 26 foreigners, and say almost 300 people were wounded.

SBI Life became the first life insurer to pay out on a policy this week, its deputy chief operating officer Malathi Narasimhan said.

On Wednesday, a week after the attacks, the firm handed a cheque to the widow of a customer who was at Leopold's cafe on Mumbai's main shopping and tourist drag, Colaba Causeway, the Mumbai Mirror reported.

It said Mr P.K. Gopalakrishnan was among 10 people and two staff killed at the popular tourist hangout when two of the gunmen threw a grenade and sprayed the cafe with automatic weapons fire on their way to the Taj Mahal hotel only metres away.

Like many Indian insurance firms, SBI is offering to upgrade existing polices and is bending its own rules for those who want to take out terrorism insurance.

ICICI-Prulife has set up a 24-hour helpline and is waiving requirements normally required for pay-outs on standard life insurance policies, such as police reports and post mortem examination details, for claims that are linked to militant attacks.

Kotak Life Insurance is offering quick settlement of claims, as its spokesman noted it had in the wake of the deadly explosions on Mumbai's rail network in July 2006, issuing cheques within a day of getting basic paperwork.

Max-New York Life sales manager Subodh Ajgaonkar said the company was starting to receive more inquiries about terrorism-linked insurance in the wake of the attacks.

But he did not expect a rush on products for a few months yet, while customers recovered from the trauma of the attacks and took stock of how the rising tide of militant violence afflicting India could affect them and their families.

India has suffered a number of militant attacks this year with scores of deaths in major cities across the country.

Mumbai itself is no stranger to violence, with 187 dying in simultaneous blasts on the teeming rail system in July 2006.

Many residents have said they expected a major attack on their city of the scale suffered by Mumbai and have been critical of their politicians for not upgrading security services and surveillance to prevent it.

Nevertheless, 'most people think 'it will not happen to me'', SBI's Narasimhan, said.

That could change in the coming months, said Mr R. Balakrishnan, executive director with financial services firm Centrum Broking.

'Corporates will need to re-look at insurance packages for top executives and independent directors who travel to sensitive zones on official work,' he said.

Although the attacks are still fresh in the minds of the city's 18 million people, insurance companies say customer interest for the new terror-linked products is slow.

Mr Poonam Bhardwaj, a senior vice-president with ICICI-Prulife, said: 'People are still not willing to accept terrorism as a part of their life so we are not seeing a huge move towards terror-linked insurance.' -- AFP