Insurance Australia Group Ltd. has finalized its catastrophe reinsurance program for 2019.
The program provides gross reinsurance protection of up to A$9 billion, an increase from A$8 billion in 2018. The program has been placed to the extent of 67.5% to reflect the cumulative whole-of-account quota share position of 32.5%, which includes the original 20% quota share agreement with Berkshire Hathaway Inc.
The reinsurance program for 2019 comprises a main catastrophe cover for losses up to A$9 billion, including one prepaid reinstatement. IAG will retain the first A$250 million of each loss, with three prepaid reinstatements secured for the lower layer of the main program.
The program also includes an aggregate sideways cover which reduces the cost of a second event to A$175 million and a subsequent event to A$25 million. The aggregate provides protection of A$475 million excess of A$375 million, with qualifying events capped at a maximum contribution of A$225 million excess of A$25 million per event.