Calliden Group will underwrite its commercial package business as an agent of Great Lakes Australia (GLA) under a three-year agreement to take effect next year.

This means Calliden’s future revenue from commercial packages will be commission-based with profit commission and no regulatory capital requirements needed for future package business.

GLA is the Australian arm of Munich Re’s Great Lakes Reinsurance UK.

Calliden CEO Nick Kirk told insuranceNEWS.com.au the alliance “works for both parties because it gives us the capital to support growth and it gives GLA the infrastructure they need”.

An interim arrangement will take effect on January 1 when Calliden will enter a quota share reinsurance program with Munich Re until arrangements with GLA are finalised.

GLA GM Peter Shaw says the agreement with Calliden is an “important progression in GLA’s developing commercial portfolio”.

All other Calliden products including motor, home and business and all commercial package business distributed through a Calliden-supported underwriting agency will continue without change.