Pool Re’s Initiative for Enhanced Terrorism Coverage
Pool Re, the UK’s government-supported reinsurer specializing in terrorism-related risks, has initiated a market consultation to examine the feasibility of incorporating terrorism coverage as a standard component in commercial property insurance for small and medium-sized enterprises (SMEs).
This consultation, extending until April 2025, aims to gather feedback from a wide range of stakeholders, including Pool Re’s members, re/insurance intermediaries, policyholders, industry associations, and the broader insurance community.
The primary objective is to collect insights on strategies to address the current protection gap and alleviate the significant impact on economic resilience caused by the low uptake of terrorism insurance among SMEs.
Tom Clementi, CEO of Pool Re, emphasized, “Only 4% of SMEs in the UK currently possess terrorism insurance, and a significant number might mistakenly believe they are covered. We aim to bridge these substantial protection and expectation gaps, thereby enhancing the resilience of the UK economy by providing our Members with a more competitive pricing model for their SME portfolios.”
Pool Re’s upcoming modernized reinsurance scheme, set to commence on April 1, 2025, is designed to simplify and reduce the cost of integrating terrorism coverage into SME property policies as a standard feature. If successful, this initiative would revert the market to its status before Pool Re’s establishment in 1993, when terrorism coverage was an integral part of commercial property insurance packages.
The consultation launched today seeks diverse perspectives on the most effective way to achieve this goal. We depend on market input to ensure our proposals are practical and beneficial to all stakeholders, so I strongly urge you to share your views,” Clementi added.
