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Report: Pool Re sponsoring cat bond for UK terror attack risk

Pool Reinsurance Co. Ltd. is sponsoring Baltic PCC Ltd. (Series 2019), a terrorism risk catastrophe bond, Artemis reported.

The U.K.-based reinsurer wants at least £75 million of retrocessional reinsurance protection against terrorist acts in the U.K. mainland. A single tranche of Series 2019 class A notes will reportedly be issued, with the proceeds to be utilized as collateral for a retrocessional reinsurance agreement between Baltic PCC and Pool Re.

The attachment point is expected to be £500 million of loss to Pool Re, according to the report. The agreement includes coverage through a £200 million layer up to £700 million, and is directed toward major terror attacks and frequency protection against smaller terrorist attacks within one risk period. Pool Re is also protected against cyber terrorism, property and business interruption risks, the report stated.

The coverage, divided into three risk periods, will reportedly span three years, starting March 1. The transaction is scheduled to be issued in February.

Baltic PCC is seeking to be listed as a U.K. protected cell vehicle and transformer, which would place it under the country's Risk Transformation Regulations 2017.