Pool Re: How to help policyholders reduce terrorism risk and premiums
Terrorism is a complicated, diffuse and persistent threat. One which requires advice and support to understand and mitigate against it. Pool Re SOLUTIONS provides insurers and policyholders crucial access to information on terrorism risk analytics, knowledge, and risk management expertise. Parallel to this SOLUTIONS also provides practical tools and resources such as the Vulnerability Self-Assessment Tool (VSAT), which have been designed to enable policyholders and risk professionals to identify and improve their security vulnerabilities.
What is VSAT?
The Vulnerability Self-Assessment Tool (VSAT®) is a simple easy to use platform. It has recently undergone a range of improvements, following user testing, to help businesses self-assess their security risk management in line with UK Government best practice; as suggested by the Government’s leading protective Security Agencies.
The tool is available for use (free of charge) to those Policyholders whose portfolios aggregate to a Material/Property Damage declared value sum insured of £50m or above, and do not consist primarily of domestic properties.
Aimed at medium and large businesses, the VSAT tool can enable Pool Re Member insurers to offer a 7.5 percent premium discount to policyholders.
How does it work?
The assessment (available via the Pool Re website) , comprises of a number of question sets related to different aspects of security risk management, with language and subject specific terminology adapted for ease of completion by competent or qualified persons within their organisation. Additionally the website provides a new comprehensive Security Best Practice Guide packed full of useful information and guidance, providing additional support and best practice across a wide range of security topics, from physical security to drones and cyber.
Policyholders are invited to complete the self-assessment process via VSAT after which they will be awarded a risk assessment score expressed as a Red, Amber, Green (RAG) rating. They will also receive an online report which provides practical advice on mitigating measures that can be put in place to reduce any risks and vulnerabilities identified. The RAG rating will be translated to a score, providing eligibility for a Loss Mitigation Credit (LMC) that may qualify for a discount on insurance.
As part of the upgrade, Pool Re has increased the Loss Mitigation Credit (LMC) to 7.5 percent from the 5 percent discount available at the last update in 2018.
Prior to this, policyholders had previously been offered a maximum discount of 2.5 percent via participation in the “Crowded Places” risk management programme run by the National Counter Terrorism Security Office (NACTSO).
The results of the assessments are entirely confidential and will remain so until policyholders decide to share them with their insurer. The discount can only be applied once the assessment has been successfully competed and submitted to the insurer.
Support is available either by FAQs, a dedicated email address and, where necessary, one-to-one support to try to ensure that all businesses have the opportunity to achieve the standard required to not only receive the credit but also improve their resilience to the threat posed by terrorism and serious crime.
VSAT has been designed to help build resilience in Great Britain to the rapidly changing terrorism risks, to help policyholders prepare if the worst should happen.
You can find out more information and access VSAT here: https://www.poolre.co.uk/vsat/
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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