Insurance Australia Group (IAG) has retained its annual catastrophe reinsurance at $7 billion by reducing its commercial portfolio.
The insurance giant, which owns NRMA Insurance, CGU, SGIO, SGIC, Swann Insurance, and WFI, said the reduced commercial portfolios in Australia and New Zealand have allowed for a stable exposure in 2017 despite growth in personal insurance lines, The Australian reported.
IAG's catastrophe reinsurance cover for 2017 will be the same as the previous two years, reflecting the 20 per cent quota share agreement with Berkshire Hathaway, which has been running since July 2015.
The catastrophe reinsurance covers the insurer's operations in Australia, New Zealand, Thailand, Malaysia, Vietnam, and Indonesia, but not its joint venture in India which has its own reinsurance arrangements, the report said.
In FY2016, IAG doled out $659m in natural disaster claims costs, exceeding its allowance by $59m after the east coast storms lashed across Queensland, NSW, Victoria, and Tasmania at the end of the fiscal year, The Australian said.
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