Pool Re has completed placement of its retrocession programme with more than 50 international reinsurers. The placement provides £2.5 billion of cover, increased from £2.475 billion.
Munich Re, Hannover Re and Fidelis were among the firms that provided significant capacity.
The retrocession covers property damage arising from conventional terror attacks as well as nuclear, biological, chemical, and radiological attacks and cyber-triggered losses.
The retrocession agreement, which will last for three years, is structured as an aggregate excess of loss treaty, which will respond if Pool Re’s individual or aggregate losses exceed £400 million in any year, the insurer said. To maximise reinsurer participation and pricing, the limit and attachment of layers has been somewhat amended, with a new layer four of £25 million added, giving more room for growth.
“We are delighted to achieve an increase in this important retrocession placement, which puts further distance between the taxpayer and the cost of terrorism losses,” said Steve Coates, Pool Re chief underwriting officer. “We have received broad support from reinsurers around the world who appreciate our strong focus on risk management, supported by credible, advanced modelling tools. This has all contributed to unaltered pricing on a risk-adjusted basis.”
“We can be rightly proud of an excellent outcome for this placement,” said Julian Enoizi, Pool Re CEO. “Pool Re’s extended retrocession placement is the largest terrorism reinsurance programme in the world and we have consistently sought to increase the amount we place as part of our strategy to return UK terrorism risk to commercial markets. Our ILS bond, where we are also seeking increased levels of indemnity, is being finalised and we hope to be able to announce its completion in the coming days.”
