UK government-backed terrorism reinsurer Pool Re has announced 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.
Pool Re noted that the classification is only a statistical matter and will not have any direct implications on its ownership, legal status, or management structure.
The reinsurer added that its retrocession agreement will continue to govern its relationship with HM Treasury, and that any changes to this agreement will be negotiated and agreed between the parties in the usual way.
The Chief Secretary to the Treasury has granted a derogation until March 31, 2021, which will enable Pool Re to continue to operate normally while HMT engages with Pool Re and its member insurers about a range of options to ensure that its effectiveness is undiminished.
Pool Re CEO Julian Enoizi 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,” he explained.
“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.”
Enoizi continued: “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.”