Since its start, the scheme has adapted to changing circumstances in the insurance market. The most significant changes occurred after the attacks in America on September 11th 2001, which caused insurers and reinsurers to reconsider the way terrorism insurance should be offered.
Until that date the conventional insurance and reinsurance market had been willing to dovetail the cover they provided with that available from the Pool Re scheme. Pool Re’s cover to insurers was restricted to damage caused by acts involving fire or explosion, and the international reinsurance market covered other types of terrorism. After 9/11, however, reinsurers were no longer able to do so.
Had Pool Re continued with these restrictions, insurers would have been unable to provide their customers with cover for terrorist events not involving fire or explosion. To avoid this situation, there were discussions between representatives of the insurance industry, buyers of insurance, the UK government, Pool Re and others.
In July 2002 an agreement was reached to widen cover and amend certain other features of the scheme in a way that responded to these changing needs. Pool Re’s cover was extended to an “all risks” basis, and no longer restricted to fire or explosion. In addition, exclusions relating to chemical, biological, radiological or nuclear attack were removed.