The Treasury has announced radical changes to Pool Re next year which will mean insurers cover the first £30m of every event of terrorism.
From the 1 January 2003, Pool Re, the insurer of last resort, will effectively become a treaty reinsurer. The change comes after months of speculation over the expansion of Pool Re and the problems surrounding terrorist attacks.
Historically insurers retained the first £100,000 per head of cover per policy, for property damage arising from fire and explosion.
From this date, Pool Re will cover all terrorism risks, for which insurers will set policyholders an increased premium.
