Insurance Australia Group (IAG) has confirmed the placement of its 2024 catastrophe reinsurance program. In a statement released Thursday 4 Jan, IAG said its 2024 reinsurance program includes main catastrophe cover for two events up to AU$10.5bn (US$7bn)—up from AU$10bn from a year ago—with an attachment of AU$500m.
The insurer placed additional drop-down cover of AU$150m, which lowers its retention to AU$236m for the first two events, with an extra premium due if the cover is activated for the first event.
An additional drop-down cover has been secured for New Zealand-specific second events of $100m in excess of AU$250m.
Third and fourth events each provide AU$250m in excess of AU$250m.
William McDonnell
IAG’s Chief Financial OfficerIAG’s Chief Financial Officer, William McDonnell, commented, “Global reinsurance markets have stabilised during 2023, allowing IAG to purchase greater reinsurance protection than we originally expected. The cost of the overall program is broadly consistent with our expectation and our guidance of a FY24 reported insurance margin of 13.5% to 15.5%.”
The reinsurance program, effective from January 1 2024, reflects the firm’s existing whole account quota share arrangements and positions IAG with a maximum event retention of AU$236m.
December impact
Australia was hit with multiple events over the Christmas period and IAG revealed that it received about 17,000 claims from natural peril events in Australia, including damages from ex-Tropical Cyclone Jasper and severe Christmas and New Year storms.
IAG’s Managing Director and CEO, Nick Hawkins, emphasised the company’s commitment to supporting affected customers and communities, saying, “The weather events that impacted communities across the holiday period were devastating and our thoughts are with those who lost loved ones during this difficult time. Our property assessors and partner builders are on the ground in affected areas supporting customers with emergency assessments and make-safe repairs.”
The insurer also highlighted that its natural perils costs for December 2023 are currently below its allowance, with a maximum event retention of AU$169m.
Further details on the financial impact of these events are set to be disclosed in IAG’s HY24 financial results, set to be announced on February 16, 2024.
