IAG has announced that it has purchased an additional $1 billion in reinsurance coverage to help protect the firm from the impact of natural disasters.
The firm company secured $1 billion of gross protection, in excess of $7 billion, including one prepaid reinstatement.
The additional cover features a contractual period of 19 months, commencing June 01, 2017, and placement to the extent of 80% to reflect existing quota share arrangements.
“We are always looking for ways to strengthen our reinsurance protection in a cost effective manner, and this purchase meets those requirements,” Nick Hawkins, IAG CFO said.
“It significantly extends the upper end of our gross protection.”
Earlier this year, IAG estimated that the firm would incur a net natural peril claims cost of approximately $140 million from claims related to Cyclone Debbie.
This saw the firm lower its reported insurance margin guidance range from 12.5%-14% to 10.5%-12.5% due to a $170 million increase in net natural peril claim cost assumption for the financial year.
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