Insurance Australia Group Ltd. (IAG) secured a catastrophe reinsurance program for 2025 and provided up to A$10 bn ($6.25 bn) in coverage for two events within the calendar year.
The insurer’s catastrophe program includes a whole-of-account quota share (WAQS) arrangement. It attaches at A$500 mn, according to a company statement.
IAG’s long-term reinsurance structure, outlined in June 2024, covers fiscal years 2025 through 2029. It includes natural peril volatility protection, providing about A$1 bn in additional annual coverage. This protection extends to a total of A$4 bn over the five-year period for events below A$500 mn, combined with the WAQS.
Chief Financial Officer William McDonnell highlighted the importance of reinsurance in reducing financial volatility.
Reinsurance is a key component of our low volatility strategy, offering downside protection against natural perils exceeding our fiscal year 2025 allowance of A$1.28 bn
William McDonnell, CFO
IAG will report its financial results for the six months ending Dec. 31, 2024, on Feb. 13, 2025.
In fiscal 2024, IAG’s profit rose due to business growth and favorable weather conditions. The insurer’s profit for the year ended June 30, 2024, reached A$898 mn, up from A$832 mn the previous year. Gross written premiums increased to A$16.40 bn from A$14.73 bn.