May 10 (Bloomberg) -- Swiss Reinsurance Co., the world's No.2 reinsurer, said insurers may need to reconsider covering some products that use so-called nanotechnology, weeks after a study on fish raised health concerns about new developments in the field.

Minute particles created with nanotechnology and used in certain sun-screens, computer-chips, drugs and coatings in the aerospace industry, can be easily absorbed by the body, said Annabelle Hett, Swiss Re risk specialist, at a conference in London about potential risks of the technology. They accumulate in organs and may have chronic effects, she added.

``You could wake up and have a huge wave of claims potentially and so you need to react now,'' said Hett. ``Insufficient research has been done to identify whether products containing nanoparticles actually pose a threat.''

Recent research in the U.S. found that nanoparticles -- each no bigger than one ten-thousandth of a millimeter -- caused brain damage in fish. Concern over nanotechnology comes after insurers were faced with billions of dollars of illness-related claims linked to asbestos and dating back to the 1970s that may dent their earnings for years.

Nanotechnology involves the development of minute particles that are about 10,000 times smaller than the size of a flea, Swiss Re said.

The insurance industry is continuing to underwrite cover for products using nanotechnology, though its uses must be analyzed to identify potential problems, said Swiss Re Chief Risk Officer Bruno Porro at the conference.

Growing Revenue

Revenue from the use of nanotechnology is expected to rise to more than $1 trillion by 2015 from $10 billion currently, Swiss Re said, citing a study by the National Science Foundation.

BASF AG, Europe's largest chemicals maker, in March said the technology may allow a factory that makes 30,000 metric tones of chemicals a year produce at the same cost as one that makes 10 times that amount. Companies including International Business Machines Corp. and Nanogen Inc. have patented technologies that work on a molecular or atomic level.

The study on the effect nanoparticles in water had on fish, conducted at the Southern Methodist University in Dallas and published March 29, involved the use of soccer-ball shaped synthetic carbon molecules known as ``bucky-balls.''

It also raised the possibility that nanoparticles may harm the environment, according to the New Scientist Web site, which published the research.

`Gray Goo Threat'

``It tells us that there is unexpected behaviour,'' said Hett, who added she was ``cautious'' about applying the conclusion of the study to humans.

Following the fish study, ``there needs to be more supporting data,'' rather than an ``emotional'' response, said Charles Gause a vice-president at Virginia-based Luna Innovations, a nanotechnology research and manufacturing company. ``There's been a lot of conjecture from the scientific community,'' he said.

Authors including Eric Drexler, in his 1986 book Engines of Creation, have warned against nanotechnology. Drexler describes in his book how self-replicating molecular machines might overtake current living organisms from bacteria to humans, known as the ``gray goo threat.''

Swiss Re will consult with regulators, insurers, industry and scientists in December this year, the reinsurer said.

To contact the reporter for this story: Jon Menon in London at jmenon1@bloomberg.net

Last Updated: May 10, 2004 12:27 EDT