The agreement sets out the contractual terms between the Pool Re and the Treasury
Pool Re, which provides terrorism reinsurance to commercial properties, has signed a new retrocession agreement with the UK Treasury.
The agreement sets out the contractual terms between the Pool Re and the Treasury and comes into force on 1 April 2025.
This date coincides with the launch of Pool Re’s treaty scheme, which aims to deliver more risk-reflective pricing, choice and flexibility.
A spokesperson for Pool Re explained: “Pool Re has worked closely with the Treasury to update the longstanding the retrocession agreement to reflect Pool Re’s modernised treaty reinsurance scheme. which launches on 1 April.
“The new treaty scheme is designed to reduce transactional friction and encourage normalisation of the market and, in so doing, further protect the taxpayer from the financial consequences of terrorism.
“The new retro agreement makes no changes to the fundamental support which Pool Re receives from the Treasury in the form of its unlimited guarantee.”
Changes
This comes after Pool Re and the Treasury announced plans to change the way the reinsurer operated in 2024.
Read: Axis Re president joins Pool Re as chief underwriting officer
Read: Pool Re launches members consultation on suggested transition to treaty model
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They announced a move to a “modernised aggregate catastrophe excess of loss treaty, which will ensure the scheme remains relevant and is fit for purpose in the digital age”.
“These changes will provide the opportunity for more of the financial risk arising from terrorism to be returned to the private market, while ensuring businesses are still able to access affordable terrorism insurance,” the treasury added.
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