Pool Re signs up Aon and Howden as insurance linked securities advisors

Pool Re, the UK government backed mutual terrorism reinsurer, appears to be set to return to the catastrophe bond market, announcing this morning that it has signed up Aon Securities and Howden Capital Markets & Advisory as its insurance-linked securities (ILS) advisors.

Recall that, Pool Re successfully renewed its ground-breaking Baltic terrorism risk catastrophe bond transaction in 2022, successfully upsizing it during marketing from an initial £75 million target to £100 million, sitting within its £2.5 billion retrocession tower.

With that £100 million Baltic PCC Limited (Series 2022-1) terrorism cat bond scheduled to mature at the end of February 2025, it stands to reason the mutual reinsurance firm would look to a potential renewal.

Hinting at that, Pool Re said this morning that after a competitive tender process, it has awarded both Aon Securities Limited and Howden Capital Markets and Advisory, the dedicated capital markets and ILS units of the insurance and reinsurance brokers, with an insurance-linked securities advisory contract.

Pool Re Chief Executive Officer, Tom Clementi, commented, “Pool Re considers all forms of risk transfer capacity in its reinsurance programme and has appointed the advisors to assist in the evaluation of potential ILS and similar solutions for the ultimate benefit of protecting UK taxpayers.”

Pool Re has obtained an aggregate of £175 million of ILS capacity from UK domiciled special-purpose vehicle Baltic PCC Ltd. via cat bond issuances in 2019 and 2022, to support its retrocessional reinsurance program arrangements.

As we reported earlier this week, Pool Re reset its Baltic PCC 2022 cat bond at a higher attachment point so that it could maintain the spread at a similar level to issuance.

The terrorism reinsurer has clearly benefited from the flexibility built-into catastrophe bonds, with that multi-year retro coverage able to be adjusted and moved to suit its risk appetite and cost sensitivity.