The chief executive of UK terror mutual Pool Re has identified key areas where the organisation can bridge the gap between the private terrorism market and public coffers.
Speaking yesterday evening (26 June) at a Cass Business School event about reducing the protection gap for catastrophic risk, Pool Re boss Julian Enoizi said there is “white space everywhere” in terms of terrorism exclusions.
Enoizi said the evolution of the terror threat in the UK from the days of the provisional IRA attacks on property to the deliberate targeting of innocent civilians with vehicles and knives to inflict maximum loss of life has left a significant gap in terrorism insurance.
He pointed to compensation that victims receive – including those caught up in the Manchester Arena, London Bridge and Westminster Bridge attacks – as one key area where Pool Re can broaden its coverage to reflect the changing nature of the terrorism threat.
In Northern Ireland, Enoizi said Pool Re had the potential to alleviate the financial burden on the government.
“Northern Ireland is still a compensation scheme as opposed to an insurance scheme – which means the government is still carrying risk on its balance sheet it perhaps doesn’t need to,” Enoizi said.
Enoizi said that the UK motor insurance market is another area where Pool Re could step in following announcements made by a number of reinsurers earlier this year that they intend to exclude terror cover from motor treaties from 2019.
“Protection gap entities have the capability to close those gaps in a way that the market also participates,” Enoizi said.
The state-backed terror pool has demonstrated its ability to innovate already this year – it has explored a terrorism triggered ILS, added cyber terrorism and is moving forward with the inclusion of non-damage business interruption triggered losses to its coverage.