Today we announced the placement of our new retrocession programme covering non-damage business interruption (”NDBI”) losses. The programme incepted on July 5th.
The Counter-Terrorism and Border Security Bill 2018, which was signed in February 2019, allows Pool Re to cover losses incurred if a business cannot trade or is prevented from accessing its premises in the wake of a terrorist attack that does not involve damage.
The cover was placed by Guy Carpenter with Liberty Specialty Markets as the lead market. Other key partners in Pool Re’s property damage retro programme, including Munich Re and AXA XL, are also participating. The cover protects Pool Re with a limit of £40m and sits excess of both a £15m placement attachment and separately, the Member retentions.
The placement, made possible by the development of in-house NDBI modelling capability, returns the majority of NDBI risk to the private market, supporting Pool Re’s long-term strategy to normalise the market to the maximum, sustainable extent possible. Cover is back to back with that provided by Pool Re to its members and is focused primarily on non-damage denial of access caused by a terrorist attack.
Steve Coates, Chief Underwriting Officer Pool Re, commented:
“This is the culmination of our longstanding efforts to both enable Pool Re to cover non-damage business interruption and to return as much of the risk to the private market as possible. Our actuarial team, in collaboration with Guy Carpenter and counter-terrorism specialists, developed an in-house model for NDBI, which allows both us and our reinsurers, to quantify and evaluate the risk.”
James Nash, CEO International Guy Carpenter, said:
“We are honoured to have been asked to represent Pool Re in bringing this important extension of coverage to the UK market. It was also an opportunity for us to showcase our expanded offering combining the established Terrorism team at JLT Re with the Pool Re team at Guy Carpenter.”