Insurance Australia Group Limited (IAG) today provided an update on its calendar 2011 catastrophe reinsurance programme, in light of recent severe weather events including Tropical Cyclone Yasi and last month’s storms and floods across Queensland, Northern New South Wales and Victoria.
IAG Managing Director and Chief Executive Officer, Mr Michael Wilkins, confirmed the Group’s comprehensive reinsurance arrangements for the 2011 calendar year were structured similarly to the programme that operated in 2010 and include:
– A main catastrophe programme, which covers losses from $250 million up to $4.1 billion;
– A three-year arrangement that reduces IAG’s maximum event retention (MER) for a first event to $150 million;
– Additional covers that reduce the MER for a second event to $125 million, and for a third event to $50 million; and
– An aggregate cover of $150 million excess of $150 million, which provides protection for accumulated losses arising from events larger than $15 million, across IAG’s operations, capped at a maximum of $50 million per event.
While assessments of the recent severe weather events in Australia are still ongoing, natural peril claim costs from the storms and floods in South-East Queensland and Northern New South Wales are currently estimated to total $110 million – $130 million, while those from the severe weather in Victoria are expected to total $25 million – $40 million.
These events have triggered components of the reinsurance programme, such that the maximum net claim cost the Group could incur in respect of Tropical Cyclone Yasi is $125 million. It is too early to determine whether the event will reach this level.
“Our priority is to make sure those affected get the right help as quickly as possible,” Mr Wilkins said.
“We’ve already ensured additional assessors and claims staff are available to move into the affected region as soon it is safe to do so, and we’re ensuring key suppliers, including builders, and hire cars and emergency accommodation are available for our customers.
“I am extremely proud of the dedication and commitment shown by our people who are working around the clock to assist our customers.”
Source : IAG Press Release
