We are pleased to announce the placement of our new £2.4 billion retrocession programme with more than 50 international reinsurers, led by Munich Re with Hannover Re also providing a significant part of the coverage.
The retrocession is structured as an aggregate excess of loss treaty which will attach if Pool Re’s losses, individually or in aggregate, exceed £400 million in any year, after member insurers’ combined retention of £250 million per event or £410 million in aggregate. The £2.4 billion is an increase from £2.3 billion in 2018 and includes £75 million provided under our ground-breaking terrorism catastrophe bond, which was launched last year.
Reflecting the underlying insurance provided by us through our member insurers, the retrocession covers property damage arising from nuclear, biological, chemical, and radiological attacks; those arising from cyber-triggered terrorist losses; as well as conventional terrorist acts.
Steve Coates, Chief Underwriting Officer, said: “For the second year in a row, this risk was modelled using Pool Re’s own model, developed in collaboration with Cranfield University and Guy Carpenter. It deploys Computational Fluid Dynamics to assess blast risk which considers how blasts move over, around and between buildings. With this continuing improvement in our modelling, we have been able to see changes in the exceedance curve, which led to the creation of a new £100m layer in order to reduce the attachment point to £400 million.”
James Nash, CEO of Guy Carpenter’s international division, commented: “Pool Re has once again been successful in sourcing new capacity from reinsurers in a challenging market whilst maintaining their core relationships. This demonstrates the wide support Pool Re that is able to achieve with their proactive and foresighted approach to the peril, coverage and technical expertise. This is an excellent result that Guy Carpenter is delighted to have brokered for them.”
Julian Enoizi, Pool Re Chief Executive, said: “We are pleased to have finalised this extended retrocession placement, one of the largest reinsurance deals in the world. As Pool Re continues to return UK terrorism risk to commercial markets, this programme is a core part of our strategy of further distancing the taxpayer from potential loss.”