Pool Re makes biggest reinsurance rate reduction in 20 years

Published on Sun, 29/05/2022 - 19:05

Pool Re, the UK’s state-backed terrorism reinsurer, will slash reinsurance rates by more than 30% in some areas, coming into effect from October 2022.

It is hoped the rate reduction will prompt a similar reduction in insurance prices although Pool Re emphasises its member insurers are responsible for setting their own prices.

The extent of the reduction will vary according to geographical location, with pricing being reduced by approximately 20% outside Zone A (central London) and could be more than 30% in many non-urban areas.

“This agreement to reduce prices was one of the standout successes of the recent government review of Pool Re,” said Tom Clementi, Pool Re’s CEO.

“We hope that it will result in lower insurance prices for policyholders, which in turn will encourage more businesses to adopt vital terrorism cover. Together with the unlimited guarantee from HMT which enables Pool Re to provide comprehensive terrorism cover, including for CBRN (chemical, biological, radiological or nuclear), we believe this significant price reduction will help provide increased resilience for businesses across the country to terrorist events.”

Pool Re said the reduction had been made possible by the significant investment it has made in its modelling capability, which will continue to improve risk understanding and further facilitate price dexterity in the future.

Any insurer writing terrorism risk in the UK can become a member of Pool Re, providing it access to the state-backed reinsurer. Members also include captive insurance companies writing terrorism risks in the UK.