Pool Re details key changes set for October

Under the changes, Pool Re will allow discounts for deductibles between £500k and £1m. For loss limits in excess of £500m, the government-backed UK terrorism reinsurer will consider discounts on locations where insured values are at least 20% more than the limit. Pool Re will also introduce revised rates, more reflective of underlying risk and based on modern modelling techniques. As part of this, Pool Re and the National Counter Terrorism Security Office (NaCTSO) have announced an initiative whereby insureds can obtain a Loss Mitigation Credit that could lead to a premium reduction of up to 2.5%. Pool Re has also developed a bespoke SME proposition that will offer a 40% discount for insureds with less than £2m material damage sum insured. All of these changes will come into effect on 1 October, 2015.hideThe measures have been introduced following requests from buyer groups, including Airmic, for Pool Re to up its game and better meet the needs of insureds. At the end of March the UK Treasury approved plans to modernise Pool Re. The planned changes were sent to Pool Re's insurer members in April and the key agreed changes have now been announced. While the bulk of modernisation will be implemented by October, it will be the first phase of a longer-term plan, Steve Coates, Chief Underwriting Officer at Pool Re told CRE last month. "We will monitor the effect of the changes on the market over a 12-18 month period and then look at what further changes could be implemented in the following two or three years," he said. "This is an evolutionary process aimed at turning Pool Re into a modern reinsurer. The first set of changes in October is fairly conservative, but they show we are starting down the path of modernisation." Pool Re said this week that the terrorism landscape and exposures under the scheme have changed enormously in the 12 years since its rating system was last reviewed. "These changes start to reflect that," it said. Julian Enoizi, Chief Executive of Pool Re, said the implementation of several key modernisation initiatives on 1 October represents a 'significant milestone in the history of Pool Re'. "The scheme must evolve in tandem with the shifting threat facing businesses across the UK. This is a continuous process, which can only be achieved through extensive collaborative discussion with our members and stakeholders. Today's announcement represents the culmination of the first stage of a process which will see Pool Re continue to look to enhance its offering and develop a scheme which not only fulfils its systemic function of underpinning the UK terrorism insurance market, but also provides a template by which insurance schemes around the world can better support and reinforce states against terrorism," he said. The loss mitigation credit initiative with NaCTSO will allow Pool Re members to implement a premium reduction for site owners and operators that engage in the Office for Security and Counter Terrorism Crowded Places Programme. Managed by NaCTSO, the Crowded Places Programme promotes broader consideration of terrorist attack methodologies and outlines a wide range of risk management options. It provides a nationally consistent, proportionate and auditable approach to terrorism risk management. The new joint initiative between Pool Re and NaCTSO will be available to site owners and operators engaging with the Crowded Places Programme. To be considered for a Loss Mitigation Credit (LMC), which may lead to a potential premium reduction of 2.5%, insureds must show they are implementing an action plan under the programme. Pool Re's CEO Mr Enoizi explained: "The LMC will act as a clear, tangible incentive for insureds to engage with the Crowded Places Programme and implement proven risk management procedures and initiatives...which will improve their resilience to a terrorist attack. I am very pleased to announce the development of this initiative in collaboration with NaCTSO which is a key pillar in our ongoing efforts to enhance and evolve Pool Re's proposition."

Pool Re details key changes set for October

Want to read this article?

Read Next

Over 50% of exporters considering moving supply chains due to geopolitical risk

New carbon capture and storage insurance product from Aon

Nordics come top in global cyber security poll

EU strengthens CO2 emission standards for heavy-duty vehicles

Italian credit insurer opens office in Singapore

Over 50% of exporters considering moving supply chains due to geopolitical risk

New carbon capture and storage insurance product from Aon

Nordics come top in global cyber security poll

EU strengthens CO2 emission standards for heavy-duty vehicles

Italian credit insurer opens office in Singapore

Want to read this article?

Read Next

Over 50% of exporters considering moving supply chains due to geopolitical risk

New carbon capture and storage insurance product from Aon

Nordics come top in global cyber security poll

EU strengthens CO2 emission standards for heavy-duty vehicles

Italian credit insurer opens office in Singapore

Related Articles