IAG has finalised its catastrophe reinsurance program for this calendar year, keeping the gross protection cover at up to $10 billion, similar to last year.

About 60% of the gross main catastrophe program is protected by multi-year coverage, providing certainty of future reinsurance cover, IAG said in a statement.

The program has been placed to the extent of 67.5% to reflect IAG’s cumulative whole-of-account quota share arrangements.

After allowance for the quota share arrangements, the combination of all catastrophe covers at January 1 results in IAG having a maximum event retention of $95 million.

“Our catastrophe reinsurance program remains an intrinsic part of IAG’s capital management strategy,” CFO Michelle McPherson said.

“The structure of the new program is similar to that of prior years, and we received strong support from our reinsurance partners with whom we have long-term relationships.”

The main features of the program, pre-quota share impacts consideration, comprise of a main catastrophe cover for losses up to $10 billion, including one prepaid reinstatement as well as IAG retaining the first $250 million of each loss.

Additionally the program provides for second and third event drop-down covers of $50 million, thereby reducing the cost of these events to $200 million, IAG said.

IAG says the cost of the program has increased by mid-single digits, in line with the assumptions incorporated into its internal planning processes.