The UK’s leading terrorism reinsurer Pool Re has today unveiled the most significant reduction in its reinsurance pricing for 20 years.
The extent of the reduction, which will come into effect from October 2022, will vary according to geographical location. However, overall, reinsurance pricing will reduce by approximately 20% outside Zone A (central London) and could reduce by more than 30% in many non-urban areas.
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In a Press release, Pool Re said these decreases are likely to prompt “a commensurate reduction in insurance prices”, but emphasised that Pool Re member insurers will remain responsible for setting pricing for their policyholders. The reinsurer accredited the pricing drop to the significant investment it has made in its modelling capability in recent years and noted this will continue to improve risk understanding, facilitating further price dexterity in the future.
In addition, Pool Re highlighted that its VSAT (Vulnerability Self-Assessment Tool) has been re-designed to improve navigability and user experience and, by using this tool effectively, policyholders who attain the benchmark standards and have portfolio sums insured in excess of £50 million, can trigger an increased discount of 10%. Discounts for different types of self-insurance, either loss limit or deductible, have also been improved.
Commenting on the news, Pool Re’s CEO, Tom Clementi said the agreement to reduce prices is one of the “standout successes” of the recent government review of Pool Re. The reinsurer hopes it will result in lower insurance prices for policyholders, he said, which will encourage more businesses to take up the vital coverage.
“Together with the unlimited guarantee from HMT which enables Pool Re to provide comprehensive terrorism cover, including for CBRN, we believe this significant price reduction will help provide increased resilience for businesses across the country to terrorist events,” Clementi added. “To support member insurers, Pool Re has also issued a new version of its underwriting manual, and is conducting member training outlining how the new rates should be applied.