Pool Re reveals ‘most significant’ reduction in reinsurance pricing
UK government-backed terrorism mutual reinsurer Pool Re has reported “the most significant reduction” in its reinsurance pricing for 20 years. The reduction will come into effect from October 2022.
The extent of the reduction will vary according to geographical location. Overall, reinsurance pricing will reduce by approximately 20% outside Zone A (central London) and could reduce by more than 30% in many non-urban areas, Pool Re said.
These decreases are likely to prompt a commensurate reduction in insurance prices, although Pool Re member insurers will remain responsible for setting pricing for their own policyholders.
The reductions in pricing have been enabled by the significant investment Pool Re has made in its modelling capability in recent years, which it believes will continue to improve risk understanding and further facilitate price dexterity in the future.
Alongside its enhanced modelling capability, Pool Re’s VSAT (Vulnerability Self-Assessment Tool) has been re-designed to improve navigability and user experience. Through effective use of the tool, policyholders who attain the benchmark standards and have portfolio sums insured in excess of £50m can trigger an increased discount of 10%. Discounts for different types of self-insurance, either loss limit or deductible, have also been improved.
Tom Clementi (pictured), Pool Re’s CEO, commented: “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 which enables Pool Re to provide comprehensive terrorism cover, including for CBRN, we believe this significant price reduction will help provide increased resilience for businesses across the country to terrorist events.”
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