Pool Reinsurance
Understanding our Treaty Transformation
Pool Re was created 30 years ago and since then, our reinsurance scheme has remained practically unchanged. However, the terrorism landscape and insurance industry has evolved dramatically.
After close consultation with our members and HM Treasury, we have agreed to propose a new structure to our scheme. In April 2025, Pool Re will introduce a revised scheme. On this page, you will find out why, what the main changes will be, and the strengths and benefits of our modernised reinsurance scheme.
The Main Changes of the Scheme

New Pricing Model
Pool Re will price each Member’s total exposures on a ‘portfolio’ basis as opposed to the current model in which a tariff must be applied on a ‘per risk’ basis. Members will no longer pay premiums against our tariff rates.

New Contract
Members will be asked to agree to a new standard Reinsurance Contract with annual pricing and retentions schedule.

Split Retention
We are proposing to split Members’ retention of terrorism perils into two sections: (1) non-conventional terrorism, which includes Chemical, Biological, Nuclear, Radiological (CBRN) and
Cyber physical damage; and (2) all other terrorism risks, or ‘conventional’ terrorism risk.

Flexible Retention
Members will, subject to a minimum level, be able to choose their own treaty retentions. We are proposing to remove the ‘per event’ option, and only apply an annual aggregate retention for each section of the contract.
Why are we making these changes?
01
Adapting to market changes
The mechanics of how the scheme reinsures its Members has not changed since 1993. However, during that time, there have been significant changes to our industry, such as: the nature of terrorism risk; the pricing of risk across the insurance industry; the way in which risks are modelled; the types of products available; and more. These developments have prompted us to rethink the design of the scheme and take advantage of technological advancements to model and price terrorism risk to degree previously impossible.
01
Adapting to market changes
The mechanics of how the scheme reinsures its Members has not changed since 1993. However, during that time, there have been significant changes to our industry, such as: the nature of terrorism risk; the pricing of risk across the insurance industry; the way in which risks are modelled; the types of products available; and more. These developments have prompted us to rethink the design of the scheme and take advantage of technological advancements to model and price terrorism risk to degree previously impossible.
02
Increasing take-up in terrorism cover in the country
The current scheme rules and pricing tariff were designed to support Members when pricing terrorism cover, in Great Britain, in a pre-digital age, and are now ill suited to the distribution channels commonly used to sell insurance. With the changes proposed, we aim to provide our Members with more flexibility, allowing them to underwrite terrorism cover in a simpler way and in line with their own risk appetite and strategy, removing unnecessary bureaucracy.
03
Returning risk to the insurance market
To maintain its unlimited guarantee from HM Treasury, Pool Re is committed to continuing to find new ways to return as much risk and premium as possible to the private sector. We are proposing to split Members’ retentions of the risk into two sections (we refer to this as “bifurcation”): (1) non-conventional terrorism, which comprises Chemical, Biological, Nuclear,
Radiological (CBRN) and Cyber physical damage; and (2) all other terrorism risks, or ‘conventional’ terrorism risk. This new approach will provide Members with a greater choice around risk appetite, and the ability to hold different retentions across both, if desired.
03
Returning risk to the insurance market
To maintain its unlimited guarantee from HM Treasury, Pool Re is committed to continuing to find new ways to return as much risk and premium as possible to the private sector. We are proposing to split Members’ retentions of the risk into two sections (we refer to this as “bifurcation”): (1) non-conventional terrorism, which comprises Chemical, Biological, Nuclear,
Radiological (CBRN) and Cyber physical damage; and (2) all other terrorism risks, or ‘conventional’ terrorism risk. This new approach will provide Members with a greater choice around risk appetite, and the ability to hold different retentions across both, if desired.

The Strengths of our scheme
Breadth of Cover – The scope of Pool Re terrorism cover will remain unchanged. This extended scope of cover, which includes CBRN, uniquely offers reinsurance for non-damage business interruption caused by a terrorism incident.
Unique Capacity – Pool Re is backed by an uncapped HM Treasury guarantee. After a single or series of catastrophic terrorist events, Members can be certain of immediate liquidity, and continued reinsurance cover at an affordable rate.
Guaranteed Acceptance – The Pool Re membership is open to any authorised insurer. Where a Member Insurer provides property insurance, they must offer terrorism cover upon request.
Solvency – Pool Re Members are guaranteed solvency for any legitimate claims arising from a certified act of terrorism and are not required to hold the vast capital reserves that Solvency II regulation would require in Pool Re’s absence.
Knowledge Centre – We provide members and businesses access to information and tools to help them understand, manage and mitigate terrorism risk.
Benefits of these Changes

Greater Flexibility
The new scheme will give Members greater freedom to set their own pricing strategy.

Pricing Stability
Pool Re will ensure that pricing for the new scheme will not differ significantly from the tariff rates that Members will be familiar with.

Consistent Framework
The new scheme will be operating within a framework that is familiar for insurers, preserving the elements of the scheme that Members value.

Removing bureaucracy and operational friction
Members need to be able to seamlessly deploy terrorism cover within their wider product sets and through digital channels without the scheme’s rules and bureaucracy getting in the way.

Returning Risk to the Insurance Market
The new scheme will facilitate greater return of premium and non-tail risk to the commercial (re)insurance market.