Pool Re in the market with a new Baltic terrorism catastrophe bond
Pool Re, the UK government backed mutual terrorism reinsurance firm, is back in the catastrophe bond market to sponsor its fourth terrorism catastrophe bond, with a Baltic PCC Limited (Series 2026-1) issuance being offered to investors, we understand.
When Pool Re announced its latest retrocession program renewal earlier this month, we indicated that sources were saying at the time that a new Baltic terror cat bond may emerge within a matter of weeks.
Previously, Pool Re had renewed its Baltic cat bonds as each of the previous vintages matured, so only keeping one deal in-force at a time within its retrocessional reinsurance arrangements.
But, as we said when reporting on this year’s UK £2.75 billion retrocession renewal, we had heard from sources that Pool Re has an appetite to return to the cat bond market, in order to stagger maturities of this retrocessional terrorism coverage from the capital markets.
This is typical for any catastrophe bond sponsor as they become more familiar with the market, and as they embed cat bonds more deeply in their reinsurance arrangements.
Given the investor base is also getting more familiar with terrorism risks, it makes sense for Pool Re to begin to look to layer protection from the cat bond market through its retrocession tower, while staggering the upcoming maturities of Baltic cat bonds at the same time.
Pool Re has previously sponsored three Baltic terrorism risk catastrophe bonds, in 2019, 2022 and 2025. Read about them all in our extensive Deal Directory.
Details are scarce on this new Baltic PCC issuance at this time and we’re told by a number of sources that this latest terrorism cat bond seems to be being offered to investors on a relatively private basis.
We’re told that, in 2026, Pool Re is again using the same UK domiciled special purpose reinsurance vehicle Baltic PCC Limited for this fourth cat bond it plans to sponsor.
Baltic PCC is offering investors a currently unknown amount of Series 2026-1 notes that relate to a protected cell of the structure, like previous deals.
The notes will be sold to investors and the proceeds used to collateralize a retrocessional reinsurance agreement between Baltic PCC and Pool Reinsurance Company, we understand.
We don’t have specific details of the size or risk metrics of the Series 2026-1 notes at this time. However, we can assume that like the previous Baltic PCC terrorism cat bonds, they will provide Pool Re with UK terrorism retrocession on an indemnity trigger and annual aggregate basis, to give continuity with its other still in-force cat bond.
Pool Re’s cat bonds sponsored to-date have closely mirrored the coverage from its retro program. We understood the last issuance from 2025 provides retro protection for commercial property losses caused by conventional terrorism attacks, plus nuclear, biological, chemical, or radiological attacks (NBCR), but not nuclear facility impacts themselves which are carved out, and also covers some physical damage from cyber-triggered terrorist losses.
We can’t be certain, but it would make sense for these new Baltic PCC 2026-1 cat bond notes to be similar in coverage terms.
Recall that, roughly one year ago, Pool Re secured a targeted UK £100 million of retrocessional protection from its third terrorism catastrophe bond, the Baltic PCC Limited (Series 2025-1) issuance.
That 2025-1 cat bond remains in-force until April 2028, so this new Baltic PCC 2026-1 issuance will provide coverage alongside that, with maturity dates now staggering for Pool Re.
We hope to bring you more details on this transaction in due course, or at the least when Pool Re announces its completion (as it typically does).
We have added this new terrorism cat bond Baltic PCC Limited (Series 2026-1) to our extensive Artemis Deal Directory and will update that entry as any further details come to light.
