Munich Re, Gen Re strike reinsurance deal with Australia’s AMP
Australian financial services firm AMP said on Aug. 10 that it completed a reinsurance program with Munich Reinsurance Company of Australasia (Munich Re) and General Reinsurance Life Australia (Gen Re).
The new arrangements are set to release approximately A$500 million ($393.3 million) of capital from AMP Life (subject to regulatory approval) further reducing the capital intensity of the wealth protection business.
The new reinsurance deals include a new quota share agreement with Gen Re to cover 60 per cent of the National Mutual Life Association of Australasia (NMLA) retail portfolio, which was merged with AMP Life on Jan. 1, 2017.
AMP also extended the existing agreement with Munich Re to cover 60 per cent (up from 50 per cent) of the AMP Life retail portfolio.
A new surplus cover agreement with Gen Re is set to assist in managing risk and volatility in individual retail claims.
AMP also announced a recapture of 35 existing reinsurance treaties which aims to simplify AMP's overall reinsurance arrangements.
The new reinsurance agreements will commence on 1 November 2017 and, when combined with the first tranche of reinsurance completed in 2016, effectively means 65 percent of AMP's retail life insurance portfolio will be reinsured for claims incurred from Nov. 1, 2017, according to the statement.
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