Pool Re, the UK government and industry backed terrorism reinsurance scheme, has increased the size of its retrocessional reinsurance program to almost £2 billion.
In the last year Pool Re had £1.95 billion of retrocession in place, so the increase is not all that significant in terms of size, but it does reflect the fact that terrorism reinsurance cover remains hard to secure and that the public private partnership of Pool Re plays a vital role in enabling insurers to provide commercial terror insurance coverage.
It’s also significant as this reflects the desire to move more of the risk from Pool Re into the private reinsurance market, reducing the reliance on the UK government and ultimately the UK taxpayer.
Steve Coates, Chief Underwriting Officer at Pool Re, commented on the placement; “This increased retrocession limit is not only evidence of Pool Re’s strategy to protect its stakeholders, but also to allow the market to write as much UK terrorism risk as they are able. We will continue to extend our protection in the future, within the boundaries of cost and counter-party security.”
James Nash, President International Division, at Guy Carpenter, added; “Guy Carpenter are delighted to have represented Pool Re in the purchase of this landmark limit that facilitates the returning of risk to the global market.”
Reinsurance broker Guy Carpenter led the placement of Pool Re’s program renewal, with a two-layer arrangement placed with a panel of global reinsurance companies, including some Pool Re members, and led by Munich Re.
The program mirrors the reinsurance cover currently provided to Pool Re members and includes Chemical, Biological, Radioactive and Nuclear terrorism risk.
Pool Re said that the enlarged retrocession program helps to protect its scheme assets, and increase the sustainability of the terrorism pool.