IAG secures reinsurance for 2024
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The news: IAG has successfully placed its catastrophe reinsurance program for the 2024 calendar year, in signs the global reinsurance sector is stabilising after years of hard market conditions.
The numbers: IAG's 2024 reinsurance program includes main catastrophe cover for two events of up to $10.5 billion, with an attachment at $500 million, an extra $250 million for a potential New Zealand event and third and fourth event covers of $250 million. The cost of the program is broadly in line with FY24 guidance of an insurance margin of between 13.5% and 15.5%, IAG said.
The context: Australia and New Zealand have become risky destinations for reinsurers in recent years, shrinking the reinsurance pool and driving up premiums for customers. The reinsurance sector improved in 2023, with capacity increasing along with improved capital growth and reinsurer returns.
The announcement comes as IAG confirmed approximately 17,000 claims from natural disasters in December, including roughly 500 resulting from ex-Tropical Cyclone Jasper and around 9,000 from Christmas day storms.
What they said: "Global reinsurance markets have stabilised during 2023, allowing IAG to purchase greater reinsurance protection than we originally expected," IAG chief financial officer William McDonnell said in a statement.
The source: IAG Media Release
