IAG says it has placed its catastrophe reinsurance program for this calendar year amid a stabilisation in the global market. 

CFO William McDonnell, who took up the role in December, says the cost of the overall program is “broadly consistent” with the company’s expectations and its guidance for a fiscal-year reported insurance margin of 13.5-15.5%. 

“Global reinsurance markets have stabilised during 2023, allowing IAG to purchase greater reinsurance protection than we originally expected,” he said. 

The reinsurance program is placed to 67.5% to reflect whole of account quota share arrangements that apply to 32.5% of natural perils. 

The program includes a main catastrophe cover for two events up to $10.5 billion, with an attachment point at $500 million. 

A further drop-down cover of $150 million reduces IAG’s retention on the first two events to $236 million, with an additional premium payable if the drop-down is used on a first event. 

The program provides an additional drop-down cover for a New Zealand-specific second event and includes third and fourth event covers of $250 million, after excess of $250 million. 

IAG announced in July that it had purchased additional pre-quota share financial-year aggregate and reinsurance covers for third and fourth events. 

After allowing for all reinsurance protections, IAG says it had a maximum event retention of $236 million as of January 1.