Australia keeps lid on terror: broker report

Email Print

29 June 2009

With a regular review of the need for the Australian Reinsurance Pool Corporation (ARPC) due to be released tomorrow, the country’s drive to control terrorism threats have been noted in a new report by global reinsurance broker Guy Carpenter.

In its 2009 Global Terror Update, Guy Carpenter says Australia retains a high level of vigilance on the mainland and its territories.

“The harmony existing between Australia and its neighbours has resulted in the early identification and break-up of several planned activities by terrorist cells,” the report says.

“Arrests have been made and charges pressed against the individuals caught by authorities [through] increased powers available to them under Australian legislation.”

The report shows governments are becoming increasingly involved in the development of insurance programs focusing on terror coverage and terror pools, although some countries’ governments continue to offer no support.

Australia’s reinsurance pool was established by the Federal Government in 2003 after a dramatic contraction in terrorism reinsurance capacity which followed the September 11 2001 terror attacks in the US.

The Government announced in February that the ARPC has substantially reduced the Commonwealth’s level of risk by arranging $2.3 billion in retrocession cover placed with reinsurers from the Australian, European, Lloyd’s and Bermudan markets.

It will continue the scheme only while terrorism insurance cover is unavailable commercially on reasonable terms. But while global capacity is returning for national pooled arrangements, “there is still little capacity at reasonable prices for individual insurance portfolios”.