Home / International / Pool Re CEO flags benefits of wider ‘black swan’ role
29 June 2020
Pool Re CEO Julian Enoizi has flagged the benefits of expanding the UK terrorism reinsurer’s role to provide protection for other emerging risks and “black swan” events, warning the industry can’t retreat behind exclusions.
Mr Enoizi says industry leaders, have already suggested a broader “Reinsurance Re” for areas where there is little or no commercial market availability, amid repercussions from the lack of business interruption cover during the COVID-19 outbreak.
“The logistical impossibility of insuring pandemics was well-known by insurers, who have excluded the risk for years, some less rigorously than others,” he says in a blog post on the Pool Re website.
“But the industry as a whole is paying a high reputational price for allowing a time bomb of mismatched expectations to grow between itself and its customers.”
Mr Enoizi says any move towards expanded arrangements should go beyond responses for pandemics.
“Creating a public-private facility to backstop pandemic risk alone, significant as this would be, would only see a similarly damaging pattern play out next time a catastrophic risk manifests and a crippling protection gap is revealed,” he says.
“It is not the trigger, but the system consequences we must partner with the Government to address.”
London-based insurance leader Stephen Catlin said in April he is chairing a steering group of industry executives that is working closely with Pool Re to look at ways the industry could respond to pandemics.
Mr Enoizi says figures show around 1% of hospitality businesses have a received a positive response from their insurer after filing a business interruption claim, while many SMEs face an existential threat in the months and years ahead.
“Retreating behind wider and more robust exclusions is not an option for an industry premised on being society’s financial safety net,” he says.
“Having constructive solutions available means having insurers at the heart of the recovery from the next national crisis.”