Aviva becomes first insurer to add terrorism cover as standard for digital SME policies

Aviva is the first insurer to add terrorism cover as standard to selected digitally traded commercial products for eligible small and medium-sized enterprise (SME) customers in Great Britain.

The move, effective from 24 August, follows the launch of Pool Re’s SME Incentive Scheme, which is designed to make terrorism protection more accessible for SMEs and simpler for brokers to discuss with customers. It will apply to risks in Great Britain where property/material damage is selected and the combined property damage and business interruption sum insured is below £10m.

Aviva is including terrorism cover as part of the standard proposition for policies and will no longer be an optional add-on for those products. The cost of the cover will be integrated into the overall product premium. Terrorism reinsurance rates available through the scheme have been reduced by up to 90% for the majority of policies, helping minimise the cost of including the cover as part of the overall premium.

The cover will be included as standard on Aviva’s digitally traded Commercial Combined, Office & Surgery, Property Owners, Shop & Salon and Computers products, with Contractors Combined to follow soon. Existing business will be updated at renewal. 

Pool Re SME Incentive Scheme

Pool Re’s SME Incentive Scheme was launched to encourage member insurers to integrate terrorism cover as standard into SME property policies. Aviva’s implementation follows Pool Re’s modernised treaty, which gives insurers greater flexibility to underwrite, price and distribute terrorism cover.

The scheme seeks to address a long-standing protection gap. Market estimates suggest that only 4% of SMEs currently buy terrorism cover. Many small businesses also believe terrorism cover is already part of their standard property insurance, when it is often excluded unless it has been specifically bought.

Although many SMEs may not be the intended target of a terrorist attack, they can still be affected by damage, disruption or the loss of access to their premises. Aviva’s change is intended to reduce the risk that businesses only discover a gap after an incident. It also helps brokers explain terrorism protection more clearly to customers, with cover built into the policy and supported by Pool Re’s revised pricing approach.

Dave Martin, Managing Director, UK Commercial and Chief Distribution Officer, Aviva, said:

“Many SMEs depend on their premises, equipment and stock to keep their businesses running, yet terrorism cover remains one of the least purchased commercial insurance protections.

"Too often, businesses are exposed without realising it. While they may not be the intended target of an attack, the impact of damage, disruption or being unable to access their premises can be significant.

"As the first insurer to include terrorism cover as standard on digitally traded products, we're helping more customers access protection that they may otherwise go without. Pool Re's new scheme has enabled us to do that in a way that is straightforward for brokers and their clients, while keeping additional costs to a minimum.

"This is another example of how we're evolving our digital proposition to make it easier for brokers to place business with Aviva and to help customers access the cover they need with greater confidence."

Tom Clementi, CEO, Pool Re, said:

“I am delighted that Aviva is making use of Pool Re’s new SME Incentive Scheme which is designed to encourage insurers to reintegrate terrorism cover as standard into commercial property policies for SME customers. This move by Aviva will help to close the SME protection gap and thereby enhance the economic resilience of the UK economy to the threat of terrorism at a time of significant geopolitical uncertainty. 

“It also aligns with Pool Re’s mandate from Government which has always been to make terrorism cover available and affordable for all businesses across the country, both large and small. I am grateful to Aviva for their strong collaboration on this initiative and look forward to other Pool Re Members joining the Scheme in the months to come.”

Aviva will continue to review how the approach can be extended to other digital products.

The change supports Aviva’s focus on improving digital trading for brokers and helping SMEs get the protection they need through straightforward, accessible products. Last October, Aviva announced another standard inclusion – at no additional cost – of an automatic uplift to a minimum 24-month BI indemnity period for new business quotes and renewal terms issued through Aviva’s Fast Trade platform for Commercial Combined, Office & Surgery, and Property Owners policies. 

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