British insurers would probably not face any threat of rating actions in the wake of a terrorist attack due to protections on that country's Pool Re reinsurance mechanism, Moody's Investors Service said today.
In a special comment, Moody's said the Pool Reinsurance Company would be highly effective at protecting its members in the event of an attack or series of attacks, and that it would not expect any meaningful rating actions for pool members.
"The extent of the cover Pool Re provides is such that the amount per event and per annum that its large insurance company membership has to bear from a UK terrorism incident, or series of incidents, is relatively small," said Dominic Simpson, a Moody's vice-president/senior credit officer and author of the report. "Furthermore, the security Pool Re offers its members is exceptional as it is effectively guaranteed by the UK government."
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