Saturday, January 20, 2018

IAG cuts catastrophe reinsurance cover

After finalising its catastrophe reinsurance plan for 2018, Insurance Australia Group is cutting its catastrophe coverage on a net-of-quota share basis.

Under the new programme, IAG’s gross main cover for the first catastrophe event would drop by A$970 million (US$759 million) to A$5.23 billion. However, the insurance firm will only pay up to A$169 million in losses for such an event, instead of the A$200 million losses it would have paid out earlier.

In a statement, IAG said the amount it earmarked under the programme was 67.5%, compared to 80% for the prior year owing to new quota share agreements, which came into effect on January 1.

IAG said last month that it would share 12.5% of its premiums and costs with Munich Re, Swiss Re, and Hannover Re in an effort to help release some capital.

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