UK government-backed terrorism reinsurer Pool Re is looking to secure a retrocession placement for July 1 of between £40 million and £50 million.
This is in response to an increase of risk shouldered by Pool Re following parliamentary approval in February that enabled it to cover non-damage business interruption (NDBI) losses incurred by businesses in the wake of a terrorist attack.
Previously, Pool Re was only able to reinsure losses incurred if a company’s premises had been physically damaged by terrorists.
The NDBI retrocession is required to allow Pool Re to keep the placement separate from the main placement.
It will cover Pool Re’s net retained loss once such losses exceed the attachment point, which is still to be set.
“NDBI retro is consistent with our aim of not retaining risk that the market is capable of writing,” said Pool Re’s Chief Underwriting Officer, Steve Coates.
“Although the market preferred that Pool Re create the NDBI solution, most of the risk will be retained either by Members, through their retentions, or passed to the retrocession market.”
Pool Re announced in March that it had renewed its 2019 retrocessional reinsurance program, at an expanded size, covering property damage arising from nuclear, biological, chemical, and radiological attacks; those arising from cyber-triggered terrorist losses; as well as conventional terrorist acts.
The £2.3 billion program, which was provided on a three-year basis and represented a £200 million increase from the 2018 iteration, was successfully placed with over 50 global reinsurers, led by Munich Re.