IAG SECURES $8BN REINSURANCE PROGRAMME

IAG’s 2018 reinsurance programme provides up to $8bn of protection with first event retentions of A$169m for Australia, NZ$169m for New Zealand, $20m for Malaysia, $17m for Thailand and approximately $1m for Vietnam and Indonesia. The placement allows for the combined 12.5% quota share agreements with Munich Re, Swiss Re and Hannover Re which commenced on January 1, as well as the 20% quota share agreement with Berkshire Hathaway which has been in place since July 1, 2015. In addition to its main catastrophe cover for losses of up to A$8bn, IAG’s programme includes an aggregate sideways cover which provides protection of A$475m in excess of A$325m. This cover reduces the maximum cost of a second event to A$125m (A$84m post-quota share) and a subsequent event to A$25m (A$17m post-quota share). Compared to 2017, IAG said its underlying aggregate exposure has increased modestly, with growth in short tail personal lines partially offset by reduced commercial portfolios, in both Australia and New Zealand.