Pool Re announces Office for National Statistics classification
Pool Re, Britain’s leading terrorism reinsurer, announces that the Office for National Statistics (ONS) has completed a classification assessment of the mutual. The ONS has independently judged that Pool Re should be classified to the central government subsector.
Any organisation’s classification by the ONS status is a statistical matter that does not have any direct implications in areas such as ownership, legal status, or management structure. The Retrocession Agreement continues to govern the relationship between Pool Re and HM Treasury (HMT). Any changes to the Retrocession Agreement will be negotiated and agreed between HMT and Pool Re in the usual way.
The Chief Secretary to the Treasury has granted a derogation until 31 March 2021, which will enable Pool Re to continue to operate as it currently does while HMT engages with Pool Re and its member insurers about a range of options to ensure that its effectiveness is undiminished.
Julian Enoizi, CEO, commented, “We will be working closely with both HMT and our member insurers to ensure that the important functions of Pool Re – increasing the resilience of the UK economy and providing a safety net for the insurance industry allowing the return of risk to the commercial insurance markets in an orderly fashion – are not jeopardised in any way.
“As the nature of the terrorist threat has continuously evolved, Pool Re has been able to respond to support the insurance market by introducing innovations such as cover for non-damage business interruption, cyber and Chemical Biological Radiological and Nuclear events. We have also been able to further distance the taxpayer from potential loss by introducing a market leading retrocession programme, and launched Pool Re Solutions, the most advanced terrorism insurance risk analysis and mitigation enterprise in the world.
“These innovations would not have been possible without the high degree of operational independence currently afforded to Pool Re. This classification now presents an opportunity to stimulate further innovative thinking about the scheme’s future and we will use the derogation period to consider all possibilities.”
Authored by Pool Re
Pool Re’s purpose is to enable the UK insurance market to offer terrorism cover to any commercial property that requires it. Central to this is the integration of Pool Re’s cover with the underlying property policy which ensures that there is no gap in the cover provided.
Pool Re was designed to insulate the taxpayer from potential financial losses arising from acts of terrorism. It has achieved this effectively, to date paying £635m in respect of 13 claims arising from certified terrorism events in the UK since our establishment. It has never called on the Government’s guarantee.
By providing foundational stability at a reinsurance level, Pool Re has created an environment for the commercial market to re-establish itself, following the market failure in 1992. This stability creates and sustains access, liquidity and confidence to generate the conditions for the private market to gradually write a growing portion of terrorism risk.
Helping UK businesses build resilience against terrorism risk is a priority for Pool Re who have developed SOLUTIONS an in-house centre of excellence created to support Members and policyholders better understand risk awareness, modelling, and management. They have also invested in a range of initiatives with Government security and intelligence agencies to provide tools such as an information sharing platform.
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