Pool Re reduces overall reinsurance pricing
Authored by Pool Re
Pool Re, Britain’s leading terrorism reinsurer, today announced the most significant reduction in its reinsurance pricing for 20 years. The reduction will come into effect from October 2022.
The extent of the reduction will vary according to geographical location. Overall, reinsurance pricing will reduce by approximately 20% outside Zone A (central London) and could reduce by more than 30% in many non-urban areas. These decreases are likely to prompt a commensurate reduction in insurance prices, although Pool Re member insurers will remain responsible for setting pricing for their own policyholders.
The reductions in pricing have been enabled by the significant investment Pool Re has made in its modelling capability in recent years which will continue to improve risk understanding and further facilitate price dexterity in the future.
Alongside its enhanced modelling capability, Pool Re’s VSAT (Vulnerability Self-Assessment Tool) has been re-designed to improve navigability and user experience. Through effective use of the tool, policyholders who attain the benchmark standards and have portfolio sums insured in excess of £50m can trigger an increased discount of 10%. Discounts for different types of self-insurance, either loss limit or deductible, have also been improved.
Tom Clementi, Pool Re’s CEO, commented: “This agreement to reduce prices was one of the standout successes of the recent government review of Pool Re. We hope that it will result in lower insurance prices for policyholders, which in turn will encourage more businesses to adopt vital terrorism cover. Together with the unlimited guarantee from HMT which enables Pool Re to provide comprehensive terrorism cover, including for CBRN, we believe this significant price reduction will help provide increased resilience for businesses across the country to terrorist events.”
To support member insurers, Pool Re has also issued a new version of its underwriting manual, and is conducting member training outlining how the new rates should be applied.
About 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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