Pool Re begins decade with drive to improve affordability, accessibility and resilience in terrorism cover
Pool Re, Britain’s leading terrorism reinsurer, today confirmed a number of significant steps to help reduce costs and improve the accessibility of terrorism insurance for businesses in the UK.
The key changes it announced are:
- Expanding the definition of SME to now include businesses with assets up to £5m - more than double the previous figure of £2m. This means that cedant insurers can more easily integrate cover within their automated SME offerings; making the cover more affordable and accessible, a long-held goal of all stakeholders.
- Separately, the standard business interruption rating is reduced from 0.019% to 0.017%, in addition to a reduction in the Zone B, MD rate, capabilities made possible by continued advancements in Pool Re’s risk modelling capabilities.
- Clients using Pool Re’s pioneering risk Vulnerability Self-Assessment Tool (VSAT) will benefit from a premium discount of 7.5%, up from 5%. This will drive improved resilience both in those businesses making use of the tool and eventually, in the UK economy as a whole.
Steve Coates, Pool Re CUO, explained; “Pool Re recognises that different buyers have different profiles, and we need to continuously adapt to their needs. Widening the definition of SME – who receive business interruption cover at no cost when they buy a physical damage policy – means that we can offer more affordable terrorism cover and as a result, better accessibility to a wider range of companies.”
Julian Enoizi, Pool Re CEO, commented: “These changes overall are about reducing the cost of reinsurance for our cedants, so that those savings can in turn be passed onto the ultimate customer. Pool Re exists to facilitate the effective provision of terrorism insurance and to ensure that it is widely available. These enhancements are all important developments in that process. We know that our cedants welcome these changes and we hope that they will enable more businesses across the UK to take up the vital offer of terrorism protection and to increase the overall resilience of the economy as a result.”
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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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