Bishopsgate bombing (London, 1993)

On Saturday, April 24, 1993, a truck carrying about a ton of homemade explosive blew up on Bishopsgate, in the heart of the financial district. A press photographer was killed, dozens of people were injured, the NatWest Tower and St Ethelburga's church were hit, and the damage estimates circulating at the time were around £350 million, some well above. The Provisional IRA claimed responsibility. The British market was already moving: after the Baltic Exchange bomb in April 1992, reinsurers were pulling out of terrorism, and primary insurers, using model clauses the Association of British Insurers circulated in November 1992, excluded it from commercial policies from January 1, 1993. Bishopsgate turned that exclusion into a political problem, since the City could no longer insure against the threat aimed at it. The Reinsurance (Acts of Terrorism) Act 1993 gave HM Treasury the power to guarantee a mutual reinsurer, and Pool Re began writing within the year. The structure has not changed in principle since: the insurer writes terrorism back in by endorsement, cedes the risk to Pool Re, and the government stands behind the pool. One large caveat, though: the first Pool Re covered only fire and explosion, and it took until 2002 to extend it to other modes of attack, NBCR included. The episode also set a dividing line that still holds in London between terrorism reinsured with government backing and political violence placed on the private market as standalone cover.