Terrorism insurance pool buys reinsurance for first time
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Pool Reinsurance Co. Ltd., the U.K. government-backed terrorism reinsurance backstop, has bought commercial reinsurance coverage for the first time since it was established two decades ago.
Munich Reinsurance Co. leads the three-year program, which provides £1.8 billion ($2.78 billion) in coverage for London-based Pool Re.
Pool Re said in a statement that the single-layer program mirrors the coverage provided to Pool Re members and includes coverage for chemical, biological, radioactive and nuclear risks.
Guy Carpenter & Co. L.L.C. placed the coverage.
The purchase of retrocessional reinsurance coverage from the commercial market is one of a series of modernization measures for Pool Re agreed in the fall.
“The purchase of external reinsurance cover is one of our key initiatives to reinforce the Pool Re scheme which will protect and increase the resilience of the members' fund, diminishing the U.K. government's exposure and distancing the U.K. taxpayers from any potential liability,” Julian Enoizi, CEO of Pool Re, said in a statement Monday.
“This program provides the largest amount of cover ever secured by a national terrorism pool and is backed by excellent security,” said Nick Frankland, London-based CEO of Europe, Middle East and Africa operations for Guy Carpenter.
Pool Re, which was set up in 1993 by the U.K. insurance industry and the government in the wake of an Irish Republican Army terrorist bombing campaign, is funded by levies on the majority of insurers and Lloyd's of London syndicates that underwrite property insurance in the United Kingdom.
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