Airmic welcomes vote to modernize U.K. terrorism reinsurance backstopReprints
Airmic Ltd., the U.K. risk management association, has welcomed a vote by the members of Pool Reinsurance Co. Ltd., the United Kingdom’s government-guaranteed terrorism backstop, to implement changes that it believes will make Pool Re more attractive to insurance buyers.
At an extraordinary general meeting Friday, Pool Re members voted unanimously in favor of changes to the pool.
The U.K. Treasury had proposed a hike in the retrocession premium it charges the pool, which is funded by levies charged to insurers offering terrorism coverage, in return for continuing its guarantee to pay claims if they exceed Pool Re’s funds.
Pool Re said in a statement that members had voted to agree to that change as well as several other modernization measure proposed by Pool Re’s board.
Those proposals include a reflection of retentions in the rates charged to buyers and a proposal to allow Pool Re to seek retrocession coverage from the commercial markets, among other things.
“In the context of where the discussions began, the concessions which have been secured, as well as acceptance by HM Treasury of the modernization plans which we wish to pursue, I am sure that this agreement will benefit our members, original policyholders, and the insurance industry as a whole,” Pool Re Chairman Tony Latham, said in the statement. “The vote has secured the long-term future of Pool Re and, as a result, the provision of terrorism insurance in Great Britain.”
London-based Airmic said in a statement Monday that it believed the proposed changes will make Pool Re more attractive to insurance buyers.
“We wholeheartedly welcome Pool Re’s new approach,” Airmic CEO John Hurrell said in the statement. “It’s a big step forward into the 21st century. It will make the scheme an even more valued protection against the threat of terrorism to U.K. business and also to many public sector organizations.”
“These are the sorts of changes that Airmic members, who are among the biggest end-users of Pool Re, have been urging for several years,” he said. “Pool Re’s management is to be congratulated on staying with them despite the very difficult pressures they face in terms of increased payments to the U.K. Treasury.”