Terrorism reinsurer Pool Re has been classified by the Office for National Statistics (ONS) as a government entity.
“ONS has concluded that Pool Re should be classified to the central government subsector with effect from March 08, 1993, the date it was created,” said the statistical institute in a statement. “Further information on why Pool Re was reclassified can be found in our Public Sector Classification Guide.”
The announcement comes following a classifications assessment that the ONS completed in the context of international statistical rules laid out in the European System of Accounts 2010 and the accompanying Manual on Government Deficit and Debt 2019.
Commenting on the development, Pool Re explained: “Any organisation’s classification by the ONS status is a statistical matter that does not have any direct implications in areas such as ownership, legal status, or management structure. The retrocession agreement continues to govern the relationship between Pool Re and HM Treasury.”
According to the mutual, any changes to the agreement will be negotiated and agreed between HMT and Pool Re in the usual manner and it will be able to continue to operate as it currently does given a derogation until March 31, 2021. In the meantime, HMT will engage with stakeholders about options aimed at ensuring that Pool Re’s effectiveness is not impacted.
“We will be working closely with both HMT and our member insurers to ensure that the important functions of Pool Re – increasing the resilience of the UK economy and providing a safety net for the insurance industry allowing the return of risk to the commercial insurance markets in an orderly fashion – are not jeopardised in any way,” stated Pool Re chief executive Julian Enoizi.
The CEO also highlighted what Pool Re has accomplished so far.
“As the nature of the terrorist threat has continuously evolved, Pool Re has been able to respond to support the insurance market by introducing innovations such as cover for non-damage business interruption, cyber, and chemical biological radiological and nuclear events,” he noted.
“We have also been able to further distance the taxpayer from potential loss by introducing a market-leading retrocession programme, and launched Pool Re Solutions, the most advanced terrorism insurance risk analysis and mitigation enterprise in the world.”
Expressing optimism, Enoizi added: “These innovations would not have been possible without the high degree of operational independence currently afforded to Pool Re. This classification now presents an opportunity to stimulate further innovative thinking about the scheme’s future and we will use the derogation period to consider all possibilities.”