Australia's terrorism insurance scheme, administered by the Australian Reinsurance Pool Corporation (ARPC) , has renewed its retrocession reinsurance programme for the 2021 calendar year. The A$3.475bn ($2.73bn) retrocession reinsurance programme, plus ARPC's net assets and the A$10bn Commonwealth guarantee, provides scheme capacity in the event of a declared terrorism incident, against commercial and eligible property assets of just under A$14bn.
“ARPC’s retrocession programme encourages a mix of global and Australian reinsurers to provide terrorism cover for Australian-based property assets, which transfers the risk and protects the Australian Government Guarantee and Australian taxpayers,” said Dr Christopher Wallace, ARPC chief executive.
The A$3.475bn retrocession programme and ARPC net assets are the first layers of funding for claims in the event of a terrorism incident.
Dr Wallace and chief underwriting officer, Michael Pennell, met online with almost 70 reinsurers in key global markets to negotiate the 2021 programme.
“For the 2021 programme, ARPC purchased an additional $25m layer of reinsurance at the bottom of the programme. This reduced ARPC’s deductible from $250m to $225m and improved ARPC’s capital strength,” said Dr Wallace.