Introduction to Pool Re’s Modernisation
With the steadfast backing of its Members, regulators, and HM Treasury, Pool Re, the UK’s government-supported reinsurer for terrorism, has successfully transitioned to a modernised catastrophe treaty reinsurance scheme. Originally announced in March 2024, this new scheme is purposefully designed to empower Pool Re in its mission to better support its Members by addressing the ever-evolving and increasingly intricate terrorism threat landscape.
Enhanced Underwriting Freedom
Pool Re’s new scheme grants Members enhanced freedom to underwrite commercial property damage and business interruption resulting from terrorist acts, aligning with their unique risk appetite and underwriting strategy. This transformative change aims to provide Members with increased flexibility in pricing risks for policyholders, thereby encouraging broader adoption among smaller businesses and those currently lacking protection.
Key Benefits of the Redesigned Model
The reinvented model comes with several pivotal benefits for Members, notably its ability to adapt to the evolving nature of terrorism risk. This ensures that coverage remains relevant and effective. Additionally, it fosters a greater uptake of terrorism insurance, offering wider protection for policyholders. Furthermore, it facilitates the return of risk and premiums to the insurance market, promoting a more sustainable and balanced approach to risk management.
Statements from Pool Re Leadership
Tom Clementi, Pool Re’s Chief Executive Officer, remarked, “At Pool Re, we are transforming our reinsurance scheme to better serve our Members amidst an evolving threat landscape and a dynamic insurance marketplace. These reforms are designed to open avenues for the insurance sector to assume greater ownership of terrorism risk, gradually normalising the market.”
Jonathan Gray, Chief Underwriting Officer, added, “This transformation was made feasible through robust collaboration with our Members, who played a vital role in shaping the new scheme. In this inaugural renewal, Member insurance companies have demonstrated a heightened interest in refining their risk appetite for terrorism, with many assuming more risk through higher retentions.”
Pool Re’s Recent Achievements
In related developments, Pool Re has completed the placement of a new retrocession programme involving over 60 international reinsurers, which now provides £2.75 billion of aggregate excess of loss cover, up from £2.4 billion. This placement offers reinsurance for property damage stemming from terrorism acts certified by the UK Government, encompassing conventional, nuclear, biological, chemical, and radiological attacks, along with a limited cyber extension.
Furthermore, Pool Re has successfully attained its target of securing £100 million in retrocessional protection through its third terrorism catastrophe bond, following the successful pricing of the Baltic PCC Limited (Series 2025-1) issuance.
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