Pool Re secures £40m non-damage business interruption retro cover led by Liberty Specialty Markets

UK government-backed terrorism reinsurer Pool Re has placed its new retrocession programme covering  non-damage business interruption (NDBI) losses.

The cover, placed by Guy Carpenter with Liberty Specialty Markets (LSM) as the lead market, protects Pool Re with a limit of £40 million and sits excess of both a £15 million placement attachment and separately, the member retentions.

Other key partners in Pool Re’s property damage retro programme, including Munich Re and AXA XL, also participated in the placement.

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.

Before the law was changed, Pool Re could only reinsure losses incurred if a company’s premises had been physically damaged by terrorists.

Pool Re said the placement was made possible by the development of in-house NDBI modelling capability, returns the majority of NDBI risk to the private market, and supports its long-term strategy to "normalise the market to the maximum, sustainable extent possible". The cover is focused primarily on non-damage denial of access caused by a terrorist attack.

Steve Coates, chief underwriting officer at Pool Re, said: “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.

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