Insurance Australia Group, the owner of State, AMI and NZI, included an extra A$250 million of drop-down cover for a New Zealand-specific second event as it announced its 2024 catastrophe reinsurance programme.
The Australia-based insurer will have main catastrophe cover for two events of up to A$10.5 billion, with an attachment of A$500m.
IAG will have drop-down cover of $150 million, reducing IAG’s retention on the first two events to $236 million.
An extra premium will be payable if the drop-down cover is activated for a first event.
The group’s revised reinsurance programme will also deliver specific drop-down cover for a second event in New Zealand, and third and fourth event covers.
IAG chief financial officer William McDonnell said reinsurance markets had stabilised last year, enabling the group to purchase more reinsurance coverage than expected.
“The cost of the overall programme is broadly consistent with our expectation, and our guidance of a 2024 financial year reported insurance margin of 13.5% to 15.5%.”
