UK government-backed terrorism reinsurer Pool Re has successfully placed a retrocession program covering non-damage business interruption (NDBI) losses, effective July 5th.
This previously-announced move is a response to the increase of risk shouldered by Pool Re following parliamentary approval in February enabling the organisation to cover NDBI losses incurred by businesses in the wake of a terrorist attack.
The cover, placed by Guy Carpenter with Liberty Specialty Markets as lead market, protects Pool with a limit of £40 million and sits excess of a £15 million placement attachment and separately, the member retentions. Munich Re and AXA XL, are also participating.
“This is the culmination of our longstanding efforts to both enable Pool Re to cover non-damage business interruption and to return as much of the risk to the private market as possible,” said Steve Coates, Chief Underwriting Officer at Pool Re.
“Our actuarial team, in collaboration with Guy Carpenter and counter-terrorism specialists, developed an in-house model for NDBI, which allows both us and our reinsurers, to quantify and evaluate the risk.”
The placement was made possible following the development of in-house NDBI modelling capability, and returns the majority of NDBI risk to the private market.
Cover is back to back with that provided by Pool Re to its members and is focused primarily on non-damage denial of access caused by a terrorist attack.
James Nash, CEO International Guy Carpenter, added, “We are honoured to have been asked to represent Pool Re in bringing this important extension of coverage to the UK market.”
“It was also an opportunity for us to showcase our expanded offering combining the established Terrorism team at JLT Re with the Pool Re team at Guy Carpenter.”