Australia’s terrorism reinsurance pool, managed by the Australian Reinsurance Pool Corporation (ARPC), announced the completion of its retrocession program for the 2025 calendar year.
The program includes a reduced limit with a higher deductible, which it says reflects ARPC’s current risk assessment and its approach to cost-effective risk transfer.
The 2025 retrocession program provides US$2.15 billion in coverage, in addition to ARPC’s net assets and the Australian government’s US$10 billion guarantee.
This structure also offers approximately US$14 billion in total pool capacity to respond to declared terrorism incidents affecting commercial and other eligible property assets.
Funding for claims in response to a declared terrorism event will first come from ARPC’s net assets, which support the US$350 million program deductible, followed by the US$2.15 billion retrocession program.
ARPC said that it engaged with more than 40 reinsurers through in-person and virtual meetings across key global markets to finalize the 2025 program.
ARPC chief executive Christopher Wallace (pictured above) noted that both Australian and international reinsurers participate in the retrocession program, which provides terrorism coverage for property assets in Australia.
ARPC continues to provide important coverage across a multitude of segments. A few months ago, the Cyclone Reinsurance Pool, also managed by the ARPC, announced that it has reached almost 99% coverage of the eligible insured population in northern Australia, based on sum insured or premium.
As of June 30, 2024, the pool had achieved approximately 99% coverage of eligible risks, with the remainder expected to join by the end of the year. Annual in-force premiums for the cyclone pool amounted to US$520 million for home policies, US$52 million for strata, and US$24 million for SME policies.
Additionally, mitigation measures applied to in-force home premiums led to a total of US$6 million in discounts.
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