Pool Re, the UK terrorism reinsurer, today announced the launch of the Vulnerability Self-Assessment Tool (VSAT). This resource, aimed at medium and large businesses, will enable Pool Re member insurers to offer a 5% premium discount to insureds which implement proven and effective risk mitigation measures. VSAT has been accredited by “Secure by Design”, the police security approval kitemark. It will be available for risks falling due on or after 1 April.
The tool was co-developed with ARL Partners and is available to all Pool Re member insurers. It builds on Pool Re’s work and collaboration with the National Counter Terrorism Security Office’s Crowded Places programme which offers discounts for risks covered by the programme. VSAT is the latest in a series of Pool Re initiatives aimed at incentivising the adoption of proven risk management practices for businesses.
Steve Coates, Chief Underwriting Officer at Pool Re, said, “Raising awareness of terrorism risk, as well as promoting and incentivising the adoption of proven risk mitigation measures, are core to Pool Re’s strategy. VSAT is the latest example of this. It has been built to deal with contemporary terrorism threats and provide a framework for policyholders to benchmark their approach to terrorism risk management. It also aims to improve their approach where necessary and in doing so provide a discount on their premium.”
Richard Thompson, Managing Partner at ARL Partners, said, “We are delighted to have worked in close collaboration with Pool Re on the development of VSAT for the terrorism insurance market. We believe that VSAT will deliver a better understanding of how best to reduce the potential risks and vulnerabilities from terrorism thereby helping to protect people and increase resilience in the UK’s economy.”
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About Pool Re
Pool Re was set up in 1993 by the insurance industry in cooperation with the UK Government in the wake of the IRA bombing campaign on the UK Mainland. Pool Re is a mutual reinsurer whose Members comprise the vast majority of insurers and Lloyd’s Syndicates which offer commercial property insurance in Great Britain, with membership affording them a guarantee which ensures that they can provide cover for losses resulting from acts of terrorism, regardless of the scale of the claims.
The scheme, which is recognised as a leading example of public/private partnership, is owned by its Members but is underpinned by a HM Treasury commitment to support Pool Re if ever it has insufficient funds to pay a legitimate claim. Pool Re pays a fee to Government for this guarantee and would repay the money over time if it ever used this facility.
However, in the event of a loss resulting from an act of terrorism, each Member must first pay losses up to a threshold, which is determined individually for that insurer. When losses exceed that threshold, the insurer can claim upon Pool Re’s reserves, which now stand at approximately £6.5 billion. These reserves have been accumulated by the Members of Pool Re since its inception. It is only in the event that these reserves and the company’s commercial reinsurance are exhausted, that Pool Re would require Government support.
Pool Re has dealt with 16 separate certified terrorism claims totalling £635m. Since March 2015, the Pool Re Scheme’s resilience has been augmented by an external reinsurance placement. This re-engages the global market in aggregated UK terrorism for the first time since 1993, and additionally provides protection to both Pool Re’s assets and the UK taxpayer.
Pool Re is also a founding member of the International Forum of Terrorism Risk (Re)Insurance Pools (IFTRIP). Established in 2016, IFTRIP is aimed at fostering closer ties and allowing for greater collaboration between the world’s terrorism (re)insurance entities. IFTRIP is comprised of national terrorism reinsurance pools from thirteen countries.