Insurance giant IAG has finalised its aggregate reinsurance cover for the financial year ended June 30, 2022 (FY22).
The FY22 aggregate cover provides $350 million protection in excess of $400 million, with individual qualifying events capped at $200 million in excess of $50 million per event.
IAG placed the cover to the extent of 67.5% to reflect its cumulative whole-of-account quota share arrangements. After allowing for quota share arrangements, the combination of all catastrophe covers at July 01, 2021, leaves IAG with a maximum event retention of $169 million.
Meanwhile, the structure of the insurance giant's main catastrophe reinsurance program for the 2021 calendar year – which renewed on January 01, 2021 – remains unchanged.
IAG will provide further details on its reinsurance arrangements and FY22 natural perils allowance at its FY21 results on August 11, 2021.
IAG also released its 1H21 results, reporting 3.8% growth in gross written premium (GWP) over the six months, compared with 1.4% growth in the prior year period.
“We have seen a strong underlying performance across our businesses over the last six months, and we will build on this performance as we sharpen our focus to deliver a stronger, more resilient IAG,” said IAG managing director and chief executive officer Nick Hawkins.
IAG pointed to rate increases in its commercial and home insurance businesses in Australia and all key classes in New Zealand as the primary drivers of its growth. Some customer growth in New Zealand's direct brands and high retention rates in IAG's commercial portfolios in Australia also supported the group's growth.
“We have strong margins across the business. Our underlying margin of 15.9% was an improvement on 2H20 (15.1%) and benefitted from lower motor claims as a result of COVID-19,” Hawkins said.
Meanwhile, IAG's $667 million insurance profit (1H20: $501 million) equated to a higher reported margin of 17.9% (1H20: 13.5%).
“In addition to the COVID-19 effect, this result benefitted from a relatively benign natural perils period, which meant we came in $39 million lower than our natural perils allowance, and credit spreads were favourable,” Hawkins said.
