Australian terror reinsurance pool increases private retro participation
Australia’s terrorism insurance scheme administrator, Australian Reinsurance Pool Corporation, has increased the private participation in retrocession reinsurance cover at renewals for 2018.
The new A$3.07 billion ($2.37 billion) retrocession reinsurance program plus ARPC’s net assets and the A$10 billion Commonwealth guarantee, provides continuing scheme capacity to pay claims of more than $13.4 billion.
“ARPC was able to increase private sector participation in the scheme by lowering the retrocession deductible from A$350 million to A$285 million and renewing the remainder of the program within our budget,” said Chris Wallace, ARPC chief executive.
“ARPC remains well positioned to protect Australian businesses from economic losses, including property damage and business interruption, in the event of a Declared Terrorist Incident,” Wallace added.
“Our private sector retrocession reinsurance program provides increased scheme capacity to pay for large terrorism events, and protects the Government’s Commonwealth guarantee and Australian taxpayers,” he added.
ARPC also completed more than two thirds of the programme on a multi-year basis, providing a degree of stability for all stakeholders in terms of the level of cover purchased and price paid.
The A$3.07 billion retrocession reinsurance program covers approximately A$3.5 trillion in Australian-based commercial property sector assets by insured value, up from A$3.4 trillion in 2017.
Wallace and chief underwriting officer, Michael Pennell, met with almost 70 reinsurers in key global markets to negotiate the 2018 program.
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