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Is Andy Burnham Right To Ask For More Cash?
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PP; 'Terrorism cover for property and business interruption has generally only been available from a Government supported scheme (Pool Re) since 1993, which involves the sharing of losses between insurers and the Government steps in if reserves are exhausted.
Despite the threats of recent years, the last claim was the July 7th London bombings in 2005 and with the scheme accumulating £5.5 billion in reserves, the Government has decided it needs more for the risk they are taking. They were only getting 10% of the premium and have demanded 50%.
Pool Re are also facing increased competition from a number of insurers offering terrorism cover, although these insurers do not tend to want to write the target properties in Central London and Pool Re then have the problem of adverse selection, ending up with all the big high risk properties, with fewer low risks properties to provide a balance.
Pool Re have therefore reviewed the scheme and are set to introduce various changes during 2015. In view of the accumulated reserves and despite the Government taking a bigger slice, premiums are not expected to increase and should fall for properties in lower risk areas, particularly for small business.'
Despite the threats of recent years, the last claim was the July 7th London bombings in 2005 and with the scheme accumulating £5.5 billion in reserves, the Government has decided it needs more for the risk they are taking. They were only getting 10% of the premium and have demanded 50%.
Pool Re are also facing increased competition from a number of insurers offering terrorism cover, although these insurers do not tend to want to write the target properties in Central London and Pool Re then have the problem of adverse selection, ending up with all the big high risk properties, with fewer low risks properties to provide a balance.
Pool Re have therefore reviewed the scheme and are set to introduce various changes during 2015. In view of the accumulated reserves and despite the Government taking a bigger slice, premiums are not expected to increase and should fall for properties in lower risk areas, particularly for small business.'
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