Pool Re, Britain’s terrorism reinsurer, announced the placement of its new retrocession program covering non-damage business interruption (NDBI) losses. The program incepted on July 5.
The Counter-Terrorism and Border Security Bill 2018, which was signed in February 2019, allows Pool Re to cover losses incurred if a business cannot trade or is prevented from accessing its premises in the wake of a terrorist attack that does not involve damage.
The cover was placed by Guy Carpenter with Liberty Specialty Markets as the lead market, via Liberty Syndicate 4472. Other key partners in Pool Re’s property damage retro program, including Munich Re and AXA XL, are also participating. The cover protects Pool Re with a limit of £40 million ($50.1 million) and sits excess of both a £15 million ($18.8 million) placement attachment and, separately, the member retentions.
The placement, made possible by the development of in-house NDBI modeling capability, returns the majority of NDBI risk to the private market, supporting Pool Re’s long-term strategy to normalize the market to the maximum, sustainable extent possible. 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.
Steve Coates, chief underwriting officer at Pool Re, said: “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. 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.”
Source: Pool Re
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