The Australian Reinsurance Pool Corporation (ARPC) has renewed the retrocession reinsurance program of its terrorism insurance scheme for the 2021 calendar year.
The program – worth $3.475 billion, plus ARPC’s net assets and the $10 billion Commonwealth guarantee – offers scheme capacity in the event of a declared terrorism incident, against commercial and eligible property assets of under $14 billion.
The $3.475 billion retrocession program and ARPC net assets serve as the first layers of funding for terrorism claims.
“ARPC’s retrocession program encourages a mix of global and Australian reinsurers to provide terrorism cover for Australian-based property assets, which transfers the risk and protects the Australian Government Guarantee and Australian taxpayers,” said ARPC chief executive Dr. Christopher Wallace.
A release said that Dr. Wallace and chief underwriting officer Michael Pennell met with nearly 70 reinsurers in global markets to negotiate the program.
“For the 2021 program, ARPC purchased an additional $25 million layer of reinsurance at the bottom of the program. This reduced ARPC’s deductible from $250 million to $225 million and improved ARPC’s capital strength,” explained Wallace.
The CEO added that ARPC “remains well positioned to be an effective provider of terrorism risk insurance” – one that enables market participation, supports national resilience, and mitigates some of the potential losses resulting from terrorism events.
