Pool Re completes transition to modernised cat treaty reinsurance scheme

With the support of its Members, regulators, and HM Treasury, Pool Re, Great Britain’s government-backed terrorism reinsurer, has completed its transition to a modernised catastrophe treaty reinsurance scheme.

Originally announced in March 2024, the new scheme intends to enable Pool Re to better serve its Members by addressing the evolving and increasingly complex terrorism threat landscape.

“The changes will provide Members with greater freedom to underwrite commercial property damage and business interruption caused by acts of terrorism in line with their own risk appetite and underwriting strategy,” Pool Re explained.

The new scheme will also reportedly provide Members with greater flexibility to price risks for policyholders, which Pool Re hopes will encourage higher adoption among smaller businesses and those currently without protection.

Pool Re highlighted that the redesigned model offers several key benefits for Members, including its ability to adapt to the evolving nature of terrorism risk, ensuring that coverage remains relevant and effective.

Additionally, it encourages greater uptake of terrorism insurance, providing broader protection for policyholders, and facilitates the return of risk and premium to the insurance market, promoting a more sustainable and balanced approach to risk management.

Tom Clementi, Pool Re Chief Executive Officer, commented, “At Pool Re, we are transforming our reinsurance scheme to serve our Members better in the face of an evolving threat landscape and a changing insurance marketplace. These changes are designed to create opportunities for the insurance sector to take greater ownership of terrorism risk and to normalise the market over time.

“This new scheme reflects our commitment to resilience and adaptability by delivering the sophistication, simplicity and flexibility required to achieve our goal of protecting businesses as well as the British taxpayer against an ever-changing terrorism threat.”

Jonathan Gray, Chief Underwriting Officer, said, “This transformation was made possible through strong collaboration with our Members, who played a crucial role in shaping the new scheme.

“In this first renewal, Member insurance companies have shown an increased interest in refining their risk appetite for terrorism, with many assuming more risk through higher retentions.”

In related news, Pool Re recently completed the placement of a new retrocession programme with over 60 international reinsurers, providing £2.75 billion of aggregate excess of loss cover, up from £2.4 billion.

This placement reportedly provides reinsurance for property damage resulting from acts of terrorism certified by the UK Government, covering both conventional and nuclear, biological, chemical and radiological attacks, as well as those from a limited cyber extension.

Pool Re has also achieved its goal of securing £100 million in retrocessional protection through its third terrorism catastrophe bond, following the successful pricing of the Baltic PCC Limited (Series 2025-1) issuance.

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