What is Pool Re Solutions?
On 12 November 2019, Pool Reinsurance Company Limited (“Pool Re”) announced the launch of Pool Re Solutions, a new in-house centre of excellence for understanding, modelling and managing the threat of terrorism. The new unit will comprise three pillars:
The Risk Awareness team: to provide analysis, intelligence and expertise on all aspects of the terrorism threat, using the most comprehensive public records on terrorist attacks available.
The Risk Modelling team: to continue to develop sophisticated terrorism modelling tools and techniques that can underpin better pricing and greater deployment of capacity into terrorism (re)insurance.
The Risk Management team: to link government agencies, academia, risk professionals and the insurance industry to ensure knowledge and best practice is widely recognised and shared.
Why has Pool Re launched Solutions?
Pool Re’s CEO, Julian Enoizi points out that the reinsurer has two key strategic priorities:
- to increase the resilience of the UK economy to acts of terrorism; and
- to grow the industry’s understanding of terrorism risk, and consequently its ability to price, manage and package a key aspect of the country’s risk exposure.
Pool Re’s aspiration is that the launch of Solutions will allow these two priorities to converge; the more policies that are appropriately priced and purchased, the stronger the resilience of the economy to acts of terrorism, and the more the insurance industry is able to grow and innovate.
The terrorism threat faced by the UK is constantly evolving and becoming more complex. Cyberterrorism poses an increasingly prevalent threat, while the risk posed by far-right extremism and dissident Irish Republicans has grown substantially, according to the Joint Terrorism Analysis Centre (JTAC). At the same time, the Islamic State group has lost one of its major appeals – that of a physical territory with which to attract recruits. Pool Re have responded to this dynamic and evolving nature of the terrorism threat with “an equally dynamic set of underwriting tools, technical services, training and insight, to support the traditional provision of reinsurance cover”.
Solutions has also been launched to try and address the information and demand gaps that are currently presenting challenges and resulting in significant underinsurance in the SME sector (particularly outside London). That underinsurance has a considerable adverse effect on the UK’s overall risk profile, so Pool Re hopes that Solutions will help to address this issue by increasing knowledge, pricing and capacity for SME sector coverage.
While the UK threat level was recently downgraded from ‘severe’ to ‘substantial’, the risk from terrorism remains high and insurers continue to require expertise in terms of evaluating, pricing, modelling and mitigating terrorism risk. For more information, Pool Re’s 2019 Threat & Mitigation Report provides a detailed analysis of the current threat landscape.
Please do contact Hogan Lovells if you would like more information, or any other assistance.
Autherd by Lydia Savill and James Wilkinson