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Mar 2024

Australia: IAG reveals higher CAT reinsurance costs for 2023

Source: Asia Insurance Review | Feb 2023

Sydney-headquartered IAG has confirmed the renewal of its A$10bn ($6.95bn) catastrophe reinsurance coverage for 2023, agreeing to bear more damage in disasters in the face of pressure from reinsurers.
 
In a stock exchange statement, IAG said that it had successfully placed its catastrophe reinsurance programme for the 2023 calendar year and renewed two of its whole of account quota share (WAQS) agreements.
 
2023 catastrophe reinsurance programme
In conjunction with IAG’s WAQS arrangements which apply to 32.5% of natural perils, the 2023 catastrophe reinsurance programme provides:
  • A main catastrophe cover for two events up to A$10bn, with a retention of A$338m (67.5% of A$500m);
  • A further drop-down cover of A$150m reducing IAG’s retention on the two events to A$236m (67.5% of A$350m) with an additional premium payable if the drop-down cover is utilised on a first event; and
  • Third and fourth event covers of A$250m excess of A$250m.
 
In addition, for the remainder of financial year ending 30 June 2023, IAG’s reinsurance protection also includes drop-down cover of A$100m for third and fourth events which reduces the retention to A$101m (67.5% of A$150m) and aggregate cover of A$350m excess of A$500m with qualifying events capped at A$200m excess of A$50m per event. A 
 
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