Pool Re renews reinsurance programme, increases limit to £2bln
Pool Re today announced that it has increased its commercial reinsurance cover to £2bn, compared with the £1.95bn of cover previously in place.
The placement further distances Her Majesty’s Treasury (HMT) and thus, ultimately, the UK taxpayer from any potential liability. It also protects scheme assets, thereby increasing the sustainability of the pool and strengthening the UK’s terrorism resilience for future years.
The two-layer programme, brokered by Guy Carpenter and placed with a stable and secure panel of reinsurance companies (which includes Members of Pool Re as well as global re-insurers) led by Munich Re, mirrors the cover currently provided to Pool Re members and includes Chemical, Biological, Radioactive and Nuclear terrorism risk.
Steve Coates, Chief Underwriting Officer at Pool Re, said, “This increased retrocession limit is not only evidence of Pool Re’s strategy to protect its stakeholders, but also to allow the market to write as much UK terrorism risk as they are able. We will continue to extend our protection in the future, within the boundaries of cost and counter-party security.”
James Nash, President International Division, at Guy Carpenter, said, “‘Guy Carpenter are delighted to have represented Pool Re in the purchase of this landmark limit that facilitates the returning of risk to the global market.’
Contact
Haggie Partners LLP
+44 (0)20 7562 4444
Peter Rigby
peter.rigby@haggie.co.uk
Brian Norris
brian.norris@haggie.co.uk
About Pool Re
The Pool Re scheme was set up in 1993 by the insurance industry in cooperation with the UK Government in the wake of the IRA bombing campaign on the UK Mainland. Pool Re is a mutual reinsurer whose Members comprise the vast majority of insurers and Lloyd’s Syndicates which offer commercial property insurance in the Great Britain, with membership of the scheme affording them a guarantee which ensures that they can provide cover for losses resulting from acts of terrorism, regardless of the scale of the claims.
The scheme, which is recognised as a leading example of public/private partnership, is owned by its Members but is underpinned by a HM Treasury commitment to support Pool Re if ever it has insufficient funds to pay a legitimate claim. Pool Re pays a fee to Government for this guarantee and would repay the money over time if it ever used this facility.
However, in the event of a loss resulting from an act of terrorism, each Member must first pay losses up to a threshold, which is determined individually for that insurer. When losses exceed that threshold, the insurer can claim upon Pool Re’s reserves, which now stand at approximately £6.2billion. These reserves have been accumulated by the Members of Pool Re since its inception. It is only in the event that these reserves and the company’s commercial reinsurance are exhausted that Pool Re would require Government support.
Pool Re has dealt with 13 separate certified terrorism claims totalling £635m. Since March 2015, the Pool Re Scheme’s resilience has been augmented by an external reinsurance placement. This re-engages the global market in aggregated UK terrorism for the first time since 1993, and additionally provides protection to both Scheme assets and the UK taxpayer.
Pool Re is also a founding member of the International Forum of Terrorism Risk (Re)Insurance Pools (IFTRIP). Established in 2016, IFTRIP is aimed at fostering closer ties and allowing for greater collaboration between the world’s terrorism (re)insurance entities. IFTRIP is comprised of national terrorism reinsurance pools from twelve countries.