Australia's IAG purchases additional A$1bn catastrophe reinsurance cover

General insurer Insurance Australia Group (IAG) has purchased an additional reinsurance protection worth A$1 billion ($750 million) against major disasters.

The insurer bought A$1 billion of gross protection in excess of A$7 billion, including one prepaid reinstatement, according to a June 9 statement.

The contractual period of the contract is 19 months commencing June 1, 2017 and concludes on 31 December 2018.

IAG chief financial officer Nick Hawkins said: “We are always looking for ways to strengthen our reinsurance protection in a cost-effective manner, and this purchase meets those requirements. It significantly extends the upper end of our gross protection.”

IAG’s existing main catastrophe tower, up to A$7 billion gross, operates on a calendar year basis and will be subject to renewal on 1 January 2018.

IAG is the parent company of a general insurance group with controlled operations in Australia, New Zealand, Thailand, Vietnam and Indonesia. Its businesses underwrite over A$11.4 billion of premium per annum, selling insurance under many leading brands, including: NRMA Insurance, CGU, SGIO, SGIC, Swann Insurance and WFI (Australia); NZI, State, AMI and Lumley Insurance (New Zealand); Safety and NZI (Thailand);  AAA Assurance (Vietnam); and Asuransi Parolamas (Indonesia).

IAG also has interests in general insurance joint ventures in Malaysia and India.

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