The Treasury is believed to be close to agreeing to extend Pool Re to cover further commercial property risks.
A source said: "The Treasury can see there is a market failure to provide cover in commercial property, but it's not yet convinced there's a similar case in terms of liability. There hasn't yet been a market failure to cover liability ."
As reported in Insurance Times last week, the Association of British Insurers (ABI) is collecting evidence to present to the Treasury on the need for Pool Re's extension.
Meanwhile, AXA UK announced that it would begin writing "selective" commercial property risks with terrorism cover.
AXA pulled out of writing the cover earlier this year because it did not have the appropriate reinsurance, but it now had a replacement.
