Pool Re’s member insurers, however, will remain responsible for setting pricing for their own policyholders
Terrorism reinsurer Pool Re has revealed the most significant reduction in its reinsurance pricing for 20 years, which will come into effect from October 2022.
The extent of the reduction will vary according to geographical location.
Outside of Zone A (Central London), reinsurance pricing will reduce by approximately 20%. Non-urban areas could reduce by more than 30%.
The reductions were made possible by the reinsurer investing in its modelling capacity in recent years, which the firm hopes will continue to improve risk understanding and further facilitate price dexterity in the future.
Despite the decreases, Pool Re’s member insurers will remain responsible for setting pricing for their own policyholders.
Pool Re chief executive Tom Clementi said: “This agreement to reduce prices was one of the standout successes of the recent government review of Pool Re.
“We hope that it will result in lower insurance prices for policyholders, which in turn will encourage more businesses to adopt vital terrorism cover.
“Together with the unlimited guarantee from HMT [Her Majesty’s Treasury], which enables Pool Re to provide comprehensive terrorism cover, including for CBRN [Chemical Biological Radiological Nuclear], we believe this significant price reduction will help provide increased resilience for businesses across the country to terrorist events.”
The firm further announced that it has re-designed its Vulnerability Self-Assessment Tool (VSAT) to improve navigability and user experience. Policyholders who attain the benchmark standards can now access an increased discount of 10%.
Pool Re has also issued a new version of its underwriting manual and is conducting member training outlining how the new rates should be applied.