Pool Re, Britain’s leading terrorism reinsurer, announced the most significant reduction in its reinsurance pricing in 20 years. The reduction, which will come into effect in October 2022, will vary according to geographical location.
Pool Re aims to enable the UK insurance market to underwrite terrorism risk for commercial property at risk-reflective rates.
Overall, reinsurance pricing will reduce by approximately 20% outside Zone A (central London) and could reduce by more than 30% in many non-urban areas. These decreases are likely to prompt a commensurate reduction in insurance prices, although Pool Re member insurers will remain responsible for setting pricing for their own policyholders.
Pool Re said the reductions in prices were enabled by a significant investment in its modeling capability, which will continue to improve risk understanding and further facilitate price dexterity in the future.
Alongside its enhanced modelling capability, Pool Re’s VSAT (Vulnerability Self-Assessment Tool) has been re-designed to improve navigability and user experience. Through effective use of the tool, policyholders who attain the benchmark standards and have portfolio sums insured in excess of £50 million can trigger an increased discount of 10%. Discounts for different types of self-insurance, either loss limit or deductible, have also been improved.
“This agreement to reduce prices was one of the standout successes of the recent government review of Pool Re. We hope that it will result in lower insurance prices for policyholders, which in turn will encourage more businesses to adopt vital terrorism cover,” commented Tom Clementi, Pool Re’s CEO.
The unlimited guarantee from the UK government enables Pool Re to provide comprehensive terrorism cover, including for chemical, biological, radiological and nuclear (CBRN) threats.
“[W]e believe this significant price reduction will help provide increased resilience for businesses across the country to terrorist events,” Clementi added.
About Pool Re
Pool Re is the insurance industry’s mutual for insuring terrorism risk in Great Britain and operates as an arm’s length government body. It was established in 1993 by the UK government in response to the losses and uncertainty caused by the Provisional IRA’s devastating bombings in financial centers in London and Manchester. As a result of their attacks, insurance cover was withdrawn for commercial property, meaning that the economy, industry, and the taxpayer were highly vulnerable to the effects of future attacks. Pool Re offers a financial safety net for around £2.2 trillion of assets and businesses.
Pool Re has a reserve fund that currently stands at £6.9 billion and has paid claims in excess of £1.25 billion (when adjusted for inflation) in relation to 17 terrorist events since its foundation.
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