Terrorism pools are providing an example for how private-public enterprises (PPEs) could boost cover for emerging risks and intangible assets, Aon says.

The broker says global terrorism pools set up after the September 11 2001 attacks in the US have broadened their approach to potential catastrophes as the risks and environment have changed.

It highlights the example of the UK’s Pool Re, which has recently introduced cyber cover, the Australian Reinsurance Pool Corporation including pandemic impacts and France’s scheme extending its mandate to “small risks”.

“PPEs need to look to the evolution of the terror pools as an example, and re-examine their own relationships and consequent effectiveness in covering the protection gaps in the areas in which they are involved,” Aon Reinsurance Solutions PPE specialty practice leader Emma Karhan says.

The increase in bushfires North America and Europe has provided an example of a rising risk combined with under-insurance, while the market also grapples with cover for intangible assets that are difficult to value.

“Lines of business that tackle new insurable risks are a challenge for any insurance market,” Ms Karhan says.

“PPEs could consider taking on the role of an incubator for new coverages of new risks that are emerging from our intangible asset-based economies.”

Aon suggests PPEs could pass the risk to the private sector in its entirety once there is a more complete understanding of the exposures and the lines are established

The report also highlights the potential for insurance to be sidelined if it is expected governments and philanthropic groups will provide post-event funding.