Pool Re has launched an incentive scheme aimed at increasing uptake of terrorism insurance among small and medium-sized enterprises across Great Britain.

The scheme will offer discounts on reinsurance costs to members that reintegrate terrorism cover as standard across SME commercial property policies. Members can apply this across part or all of their SME portfolios, with reduced pricing linked to the relevant reinsurance element placed with Pool Re.

SMEs account for around 99% of UK businesses but remain significantly underinsured against terrorism risk. A Federation of Small Businesses survey found only 4% hold dedicated terrorism insurance. Following the 1992 IRA attack on the Baltic Exchange, terrorism exclusions became standard in commercial property policies, leaving cover as an optional add-on.

Pool Re said participation is voluntary but requires terrorism cover to be embedded as standard and non-removable within SME property products to qualify. It said the aim is to improve consistency and address misunderstanding among SMEs about existing cover.

Tom Clementi, chief executive of Pool Re, said: “Enhancing terrorism protection for SMEs is not only about closing an insurance coverage gap, it is about strengthening national economic resilience in a world where the terrorism risk landscape continues to evolve. This scheme gives our Members an additional incentive to offer terrorism cover as standard, as was the case prior to the formation of Pool Re in 1993. With no material financial burden placed on SMEs, we hope the scheme will lead to a significant uptick in coverage across the economy.”

The scheme follows changes to Pool Re’s treaty framework last year, which moved to reinsuring members’ entire portfolios for a single annual price.

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