Pool Re, Britain’s leading terrorism reinsurer, has taken steps to help reduce costs and improve the accessibility of terrorism insurance for businesses in the U.K., in part by expanding the definition of small and medium-sized enterprises (SME).


“Pool Re recognizes that different buyers have different profiles, and we need to continuously adapt to their needs,” said Steve Coates, Pool Re CUO. “Widening the definition of SME – who receive business interruption cover at no cost when they buy a physical damage policy – means that we can offer more affordable terrorism cover and as a result, better accessibility to a wider range of companies.”


“These changes overall are about reducing the cost of reinsurance for our cedents, so that those savings can in turn be passed onto the ultimate customer. Pool Re exists to facilitate the effective provision of terrorism insurance and to ensure that it is widely available,” commented Julian Enoizi, Pool Re CEO.


“These enhancements are all important developments in that process. We know that our cedents welcome these changes and we hope that they will enable more businesses across the U.K. to take up the vital offer of terrorism protection and to increase the overall resilience of the economy as a result,” Enoizi added.


The key changes Pool Re announced are:

Expanding the definition of small and medium-sized enterprises (SME) to include businesses with assets up to £5 million (US$6.5 million), more than doubling the previous figure of £2 million ($2.6 million). This means that cedent insurers can more easily integrate cover within their automated SME offerings, making the cover more affordable and accessible.


The standard business interruption rating is reduced from 0.019% to 0.017%, in addition to a reduction in the Zone B, material damage rate. Pool Re said these changes are made possible by continued advancements in Pool Re’s risk modeling capabilities. (A Pool Re representative explained that the U.K. is divided into zones from a pricing perspective to determine potential risk exposure. Zone B covers major cities and urban areas other than Central London (City, West End and Canary Wharf) which is Zone A.)


Clients using Pool Re’s risk Vulnerability Self-Assessment Tool (VSAT) will benefit from a premium discount of 7.5%, up from 5%. This will drive improved resilience both in those businesses making use of the tool and eventually, in the UK economy as a whole.


About Pool Re

Pool Re was set up in 1993 by the insurance industry in cooperation with the U.K. government in the wake of the Irish Republic Army (IRA) bombing campaign on the UK mainland. Pool Re is a mutual reinsurer whose members comprise the vast majority of insurers and Lloyd’s syndicates that offer commercial property insurance in Great Britain.


Membership provides a guarantee that insurers can provide cover for losses resulting from acts of terrorism, regardless of the scale of the claims. Pool Re’s reserve fund currently stands at £6.5 billion, and it has paid claims in excess of £1.25 billion (when adjusted for inflation) for 17 terrorist events. Pool Re has never had to call on the unlimited government loan facility which underpins the company.