Govt embarks on five-year review of Pool Re

The Government is to conduct a review into the effectiveness and strategic direction over the next five years of Pool Re.

Changes made since the last review in 2014 comprised the inclusion of cover for non-damage business interruption resulting from terrorist activity, the extension of cover to include physical damage caused by cyber terrorism and pricing improvements to better reflect policyholder risk. And, in line with its objective of returning risk to private markets, member retentions increased over this time to form the world’s largest terrorism retrocession programme including the first ever ILS layer. These changes serve to spread risk into the commercial markets and insulate UK tax payers from potential liability resulting from terrorism losses.

Julian Enoizi, chief executive officer of Pool Re, said: “Behind Pool Re’s success as a public private partnership is our close cooperation with both Her Majesty’s Treasury and our members. This cooperation ensures that we continue to provide the most relevant, affordable coverage against terrorism loss while facilitating the long term return of terrorism risk to private markets. We welcome this latest review as an opportunity to further develop our strategy to stay ahead of the evolving risk environment and to add increasing value to our members and their policyholders.”

Pool Re was in February classified as a central government body. The review will therefore seek to ensure that requirements for these bodies are met without compromising the organisation's ability to operate.

Carried out by the Treasury in consultation with UK re/insurers, the findings of this latest five-year review are expected in Spring 2021 following a consultation period later this year.

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