The UK Treasury has announced the launch of its latest five-year review of Pool Re, the country’s government-backed terrorism reinsurer.
The review will aim to ensure the good functioning of the UK’s terrorism re/insurance market, proper protection of public interests, and Pool Re’s proposed strategic direction for the next five years.
It will be conducted by Her Majesty’s Treasury (HMT), with close engagement with Pool Re and stakeholders across Whitehall and in consultation with the UK re/insurance sector.
In addition, Pool Re will form a Review Advisory Group, consisting of CEOs from both large and small member insurers, captives, and other stakeholders.
The review will report to the Economic Secretary to the Treasury, and HMT will publish a consultation document in late 2020 calling for evidence from interested parties followed by a report in spring 2021.
Since HMT’s last review of Pool Re in 2014, a series of changes have been implemented, including the inclusion of cover for non-damage business interruption resulting from terrorist activity, the extension of cover to include physical damage caused by cyber terrorism, and pricing improvements to better reflect policyholder risk.
Also since the last review, member retentions have increased and Pool Re has built a terrorism retrocession programme that includes an ILS layer.
Both initiatives are seen to support Pool Re’s objective of returning risk to private markets and insulating UK tax payers from potential liability on terrorism losses.
Furthermore, in 2019 Pool Re Solutions was launched to provide analysis and advice to members on terrorism risk awareness, modelling and management, to promote the mitigation of impact from potential loss.
“Behind Pool Re’s success as a public private partnership is our close cooperation with both Her Majesty’s Treasury and our members,” said Julian Enoizi, Chief Executive Officer of Pool Re.
“This cooperation ensures that we continue to provide the most relevant, affordable coverage against terrorism loss while facilitating the long term return of terrorism risk to private markets,” he explained.
“We welcome this latest review as an opportunity to further develop our strategy to stay ahead of the evolving risk environment and to add increasing value to our members and their policyholders.”