IAG completes reinsurance agreements

IAG, short for Insurance Australia Group, is a leading insurance company. Reinsurance arrangements refer to the process of transferring a portion of insurance risk to other insurers, known as reinsurers, in order to mitigate potential losses.

By finalizing reinsurance arrangements, IAG establishes agreements with reinsurers to share the risk associated with their insurance policies.

The specific details of IAG’s reinsurance arrangements can vary depending on factors such as the type of coverage, geographical region, and the level of risk involved. These arrangements are crucial for insurance companies like IAG to manage their overall risk exposure and ensure financial stability.

Finalizing reinsurance arrangements typically involves negotiations between IAG and reinsurers to determine the terms and conditions of the agreements. This includes establishing the amount of risk to be transferred, the premiums to be paid, and the coverage limits provided by the reinsurers.

By entering into reinsurance agreements, IAG can enhance its ability to handle large and catastrophic losses. Reinsurers help spread the risk across multiple parties, reducing the financial impact on IAG in case of significant claims. This allows IAG to maintain a balanced portfolio and provide continued protection to its policyholders.

Overall, finalizing reinsurance arrangements is a crucial strategic step for IAG to manage risk, ensure financial stability, and protect its business operations in the face of unforeseen events.

IAG renews significant reinsurance deal with Hannover Re, covering a third of its claims costs.

IAG extends reinsurance agreement with Hannover Re for five more years.

IAG renews reinsurance agreements with Hannover Re, Munich Re, and Swiss Re for a significant portion of its natural perils coverage.

CFO Michelle McPherson confirmed that IAG has successfully renewed all four of its whole-of-account quota share reinsurance arrangements with top global reinsurers.

“These renewed arrangements provide coverage for 32.5% of our total gross claims costs, allowing us to secure the remaining 67.5% of the main catastrophe program from global reinsurance markets,” explained CFO Michelle McPherson.

According to CFO Michelle McPherson, the renewed quota share arrangements offer “consistent financial outcomes” and hold significant value in the current challenging reinsurance market.

In the recent update, IAG disclosed the acquisition of aggregate and reinsurance covers for third and fourth events, covering the financial year until June 30, 2024.

IAG stated that the newly acquired covers have been allocated to reflect the company’s whole-of-account quota share arrangements, covering 67.5% of the required amount.

IAG has set a maximum event retention of $169 million for the first and second events, taking into account the quota share arrangements.

The aggregate cover purchased by IAG offers protection of $250 million above a threshold of $600 million, with each qualifying event limited to $200 million above a threshold of $50 million per event.

To safeguard events exceeding $200 million, coverages totaling $150 million have been acquired for both the third and fourth occurrences.

On August 21, IAG is scheduled to unveil its financial results for the 2022/23 period, along with its guidance for the current fiscal year.



Source : insurancenews.com.au

By Ryan

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