IAG has finalised catastrophe reinsurance protection for losses up to $7 billion this year, locking in cover similar to last year’s program.

The total reflects a relatively stable overall exposure, with IAG saying growth in short-tail personal lines has been offset by reduced commercial portfolios in Australia and New Zealand.

The program has been 80% placed after allowance for a quota-share arrangement with Berkshire Hathaway, under which the US-based company pays 20% of claims and takes 20% of IAG’s consolidated gross written premium.

The cover contains an increased multi-year component involving several counterparties, while greater sideways cover reduces the cost of second events to $125 million and subsequent events to $25 million, before the quota share. Costs drop to $100 million for a second event and $20 million for subsequent events after the Berkshire deal.

IAG also has a separate natural perils cover of $96 million in excess of $680 million, post quota share, which runs in line with the financial year to June 30.

It says the combination of all catastrophe covers in place at the start of this month results in post-quota share, first-event retentions of $200 million for the group’s Australian businesses, $NZ200 ($189 million) for New Zealand, $20 million for Thailand and Malaysia, and about $1 million for Vietnam and Indonesia.

The reinsurance does not apply to IAG’s joint venture in India, which has its own arrangements.