Pool Re: Terrorism model must adapt to cover new threats

Insurers and the UK’s terrorism backstop Pool Re must adapt to new risks posed by non-traditional terror attacks, including the lone-wolf tactics behind this year’s atrocities in London and Manchester, according to Pool Re CEO Julian Enoizi.

Speaking to Bloomberg, Mr Enoizi said insured losses from such terrorist attacks and cybercrime have resulted in non-physical losses for insurers, mainly business interruption.

“We need to close gaps such as business interruption that’s not the result of physical damage and coverage of cyber terror, as well the low take-up among businesses outside of London,” Mr Enoizi said.

Mr Enoizi added that insurers need to address the issues raised by terror attacks that use cars as a weapon to harm pedestrians. Motor insurance with unlimited cover exposes insurers to substantial payouts, he said.

Mr Enoizi went on to say that the Pool Re model has worked well, but that the terrorism threat has changed in recent years and the model will need to adapt. “We need to evolve the model in line with changing threats,” he said.

Pool Re was first set up in the 1990s at the height of the IRA threat. Supported by government, Pool Re was established as a backstop for insurers to meet catastrophic terror claims, which until now have focused on physical losses such as damage to buildings.

Mr Enoizi confirmed that Pool Re has received claims for this year’s terror attacks in Manchester and London.