Pool Re, the UK’s government-backed terrorism reinsurer, has completed the placement of its expanded retrocession programme, securing £2.75 billion of aggregate excess of loss cover with participation from more than 60 international reinsurers.
The programme, which was brokered by Guy Carpenter, represents an increase from the previous £2.4 billion limit. Hannover Re and The Fidelis Partnership were among the firms providing pricing guidance.
The expanded retrocession arrangement shifts a greater portion of the financial risk associated with terrorism events away from the UK taxpayer and into the private reinsurance market. Pool Re said that the programme is designed to ensure terrorism insurance remains available and affordable to UK businesses.
The cover applies to property damage resulting from terrorism events certified by the UK government, including conventional attacks and those involving nuclear, biological, chemical and radiological (CBRN) weapons. A limited cyber extension is also included in the cover.
Over the years, Pool Re's retrocession programs have shown a consistent trend of increasing coverage limits and expanding the scope of covered perils. The inclusion of cyber terrorism in 2018 represented a significant broadening of coverage to address emerging risks. The attachment point for these programs has remained at £400 million, indicating a stable threshold for when the retrocession coverage activates.
In 2022, Pool Re’s retrocession program saw the cover increase to £2.5 billion. This program maintained the comprehensive coverage of previous years, including property damage from CBRN, cyber-triggered terrorist losses, and conventional terrorist acts.
The three-year agreement was structured as an aggregate excess of loss treaty, responding if Pool Re's losses exceeded £400 million in any year.
Jonathan Gray (pictured above), Pool Re’s chief underwriting officer, said the organisation appreciated the support received from participating reinsurers, with several existing markets increasing their capacity and new participants joining the panel.
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