Pool Re, the government-backed terrorism reinsurer in the UK, has transitioned to a “modernised” catastrophe treaty reinsurance scheme.  

This move, first announced in March 2024, is part of Pool Re’s strategy to enhance its services to address the terrorism threat landscape. 

The new scheme grants Pool Re members increased latitude to underwrite terrorism-related commercial property damage and business interruption, aligning with their individual risk appetites and underwriting strategies.  

This is expected to increase the adoption of terrorism cover among smaller businesses and those previously without such protection. 

The foundational rules of Pool Re’s scheme and the scope of terrorism coverage provided remain unchanged.  

The coverage continues to be unlimited, subject to each member’s retention level.  

The modernised treaty aims to simplify the underwriting and distribution processes for terrorism insurance by leveraging technology.  

Additionally, Pool Re has introduced a bifurcated approach, giving members the choice to set retentions for non-conventional terrorism risks such as chemical, biological, nuclear, radiological and cyber physical damage, alongside conventional risks. 

Pool Re CEO Tom Clementi said: “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.” 

Pool Re chief underwriting officer Jonathan Gray stated: “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.” 

Last month, Pool Re placed a new retrocession programme with the participation of more than 60 international reinsurers. This programme has increased the aggregate excess of loss cover to £2.75bn (£3.56bn) from £2.4bn.