Members of Pool Re, Britain’s government backed terrorism reinsurer, have resoundingly backed the outcomes from HM Treasury’s five yearly review of the entity. The review, which was approved unanimously by members who voted, praised the innovative work of Pool Re as the world leader in terrorism reinsurance and set out a collaboratively agreed scope of works to ensure the continued success and fitness for purpose of the scheme into the future.
The scope of works makes provision for Pool Re to explore ways in which to innovate in the way it seeks to returns risk to the market, including examining bifurcation of the risk between conventional and non-conventional terrorism and transitioning to a treaty system of reinsurance to facilitate increased risk retention by cedants. It also allows the continued development of consultancy services to members through the Pool Re Solutions division.
Members backed a resolution from the Pool Re Board at a General Meeting in London, to recommend acceptance of the HMT review findings, which provide a roadmap for the strategic direction of the mutual.
The approval by members also secures Pool Re’s unlimited guarantee, which HM Treasury acknowledged remains essential to its effective operation and to the opportunity for facilitating the future expansion of the UK terrorism insurance market. It also confirms:
• The re-classification of Pool Re as an arm’s length body while ensuring it will maintain independence for the organisation’s practical operations.
• The Board of Pool Re remains responsible for setting the strategic direction of the company and its governance.
• The mutual’s fund, built up over many years, remains in Pool Re’s sole ownership for the purpose of the company’s reinsurance business.
• The scheme rules remain fit for purpose.
• Pool Re can continue to invest in risk mitigation projects essential to building the resilience of the UK against the terrorism threat.
Angela Knight CBE, Pool Re chair said: “This positive result is very welcome news. The support of members is critical for the future development of Pool Re, and we are delighted that they have shown their support for all the strategic proposals we agreed with HMT.”
Julian Enoizi, Pool Re chief executive said: “Members have ensured the Board can open a new chapter with great confidence and a clear and exciting mandate to continue its modernising journey and seek ways to return risk to the commercial market. The scope of works agreed between Pool Re and HMT will safeguard a continued ability to innovate and has set the organisation on a path to its next exciting stage. Following the completion of my second HMT review process, I am immensely proud that HMT and Pool Re have developed such a positive working relationship and that Pool Re continues to deliver the best possible outcomes for both members and the taxpayer.”
John Glen, economic secretary to the Treasury, said: “The UK is a world leader in terrorism reinsurance – and I am delighted that Pool Re’s board and its members have approved our 5-year strategic review. The planned reforms will modernise the terrorism reinsurance market, make premiums cheaper for businesses, and most importantly – will extend the government’s unlimited guarantee so insurers have the confidence to insure against the financial costs of terrorist acts.”
The General Meeting and the vote are Enoizi’s last as outgoing chief executive, before he leaves Pool Re.
HM Treasury and Pool Re will now proceed to signing the Framework Document and the Amended Retrocession Agreement.