Pool Re eyes first ILS deal

Pool Re is looking to issue insurance-linked securities (ILS), having exhausted traditional reinsurance capacity, Pool Re CEO Julian Enoizi, told Monte Carlo Today. In April 2018, it selected GC Securities as its ILS advisor and placement agent.

Pool Re members comprise the majority of insurers and Lloyd’s syndicates which offer commercial property insurance in the UK.

The ILS would cover property damage terrorism and cyber terrorism.

Enoizi said Pool Re has exhausted the available reinsurance capacity and is therefore turning to the capital markets.

“We buy around 16 to 17 percent of the global terrorism reinsurance capacity. While we will continue to try to nudge up the amount of reinsurance we buy every year, there isn’t a whole lot more out there,” he said.

During the Rendez-Vous, Enoizi wants to further discuss the feasibility and potential structure of the ILS issue.

Meanwhile, Pool Re is in the process of extending the terrorism coverage it offers to include non-damage business losses resulting from acts of terrorism. Furthermore, it will extend its cover to include material damage and direct business interruption (BI) caused by cyber terrorism from April 2018.

As part of this move, Pool Re extended its retrocession programme at renewal to include material damage and direct BI caused by acts of terrorism using remote digital interference.

The three-layer programme matches the cover for Pool Re member insurers, with cyber terrorism now included along with chemical, biological, radioactive and nuclear risks.

“Our strategy has always been to put as much of this risk back into the private market as possible, to de-risk the government as much as possible and to normalise the market over time as a result,” Enoizi concluded.