Pool Re, Great Britain’s government-backed reinsurer for terrorism-related risks, has announced the successful implementation of a modernized catastrophe treaty reinsurance scheme. The transition to the new model, which began in March 2024, aims to address the evolving and complex landscape of terrorism threats, while enhancing its ability to serve its members.
A news release highlighted that the revamped scheme, backed by regulators, HM Treasury, and Pool Re’s Members, provides greater flexibility in underwriting commercial property damage and business interruption due to acts of terrorism. It also introduces the ability for members to price risks more freely, encouraging wider adoption of terrorism coverage, particularly among smaller businesses and those currently without protection.
Pool Re noted that the core aspects of its terrorism coverage remain intact. The coverage continues to be unlimited and operates in excess of a member’s retention.
Pool Re said the updated scheme enables it to better address the changing nature of terrorism risks. By utilizing advanced technology, the organization can model and price terrorism risks with greater accuracy. This improvement allows Pool Re to handle a range of threats, from simpler, more predictable attacks to more complex and sophisticated ones.
The new structure also facilitates broader adoption of terrorism coverage. Members now have more flexibility in underwriting and distributing terrorism cover. The new system aims to make it easier for businesses, especially smaller ones, to access this coverage.
In addition, the revised scheme offers members more control over how they manage risks. They can choose tailored retentions for different types of terrorism risks, such as chemical, biological, radiological, nuclear (CBRN), and cyber physical damage, as well as more conventional risks.
“We are transforming our reinsurance scheme to serve our members better in the face of an evolving threat landscape and a changing insurance marketplace,” said Tom Clementi, CEO of Pool Re. “These changes are designed to create opportunities for the insurance sector to take greater ownership of terrorism risk and to normalize the market over time.”
What are your thoughts on the newly unveiled scheme? Share your insights below.
