AG SECURES REINSURANCE COVER OF A$7BN FOR 2015 CATASTROPHE PROGRAMME

Insurance Australia Group (IAG) has secured reinsurance protection of up to A$7bn through its 2015 catastrophe programme, the Australian insurance giant has announced. IAG will retain the first A$250m of each loss, with three reinstatements secured for the lower layer of the main programme. IAG said it has secured an expanded aggregate sideways cover which reduces the cost of a second event of A$175m and subsequent events to A$25m. The cover has a A$250m upper layer providing Australia and New Zealand earthquake and cyclone cover. IAG said the combination of all catastrophe covers it has in place as of January 1 means it has maximum first event retentions of A$250m for Australia, NZ$250m for New Zealand, A$25m for Thailand and Malaysia, and less than A$1m for Vietnam. The catastrophe programme does not cover IAG’s joint ventures in China and India, which the insurer said have their own reinsurance arrangements.