The UK’s government-backed mutual terrorism reinsurer Pool Re has renewed its retrocessional reinsurance program at an expanded size and with the inclusion of coverage for cyber terrorism events, a risk the reinsurer has been promising to include within its offering.
The retrocession program was increased in size by £100 million to £2.1 billion and now includes coverage for material damage and direct business interruption (BI) due to acts of terrorism using remote digital interference.
Guy Carpenter brokered the placement for Pool Re, which was placed with an expanded panel now consisting of 47 reinsurers, with reinsurance giant Munich Re continuing to be largest market backing the program.
The terror retrocession program is structured into three-layers designed to match the coverage provided by Pool Re to its member insurers, with cyber terrorism now included alongside chemical, biological, radioactive and nuclear risks.
Pool Re said that this renewal is “the most comprehensive and largest terrorism retro placement in the world.”
Julian Enoizi, chief executive, Pool Re, commented “This retrocession programme represents a significant milestone for Pool Re and the culmination of months of collaboration, not only with our reinsurance panel and Guy Carpenter, but also with Cambridge Centre for Risk Studies who provided the research into cyber terrorism.
“We have sought to make the cover we provide truly reflective of the risks our member insurers face and also to future proof the scheme to ensure it represents the most comprehensive terrorism reinsurance cover possible. The appetite to engage with the programme has been exceptional and reflects the reinsurance market’s comfort with the risk and the modelling information provided by Pool Re. It also highlights their support for the pool model, which provides them with sufficient information to determine the level of capacity they are comfortable providing. We will continue to seek to extend our programme, in line with our cost and security parameters.”
James Nash, president, international, at Guy Carpenter, added, “Guy Carpenter is delighted to have worked with Pool Re to not only grow the retrocession limit to £2.1bn but also extend the cover to include damage by remote electronic means. This closes a gap in coverage at a time when cyber-attacks have never been higher on the industry’s agenda of concerns.”
The addition of coverage for physical damage and BI from cyber terrorism attacks has been promised throughout this year and member insurers will be encouraged to see Pool Re follow through on its promise and secure the backing to be able to expand its terror reinsurance product effectiveness.