QBE has raised its net catastrophe allowance this year to $US685 million ($896 million), up from $US550 million ($719 million) last year while finalising a reinsurance program that reflects heightened frequency.

Interim Group CEO Richard Pryce says the global insurer has renewed its reinsurance structure “broadly consistent with the expiring program and at terms slightly better than budget”.

“The reinsurance renewal, including increased catastrophe allowance, has been factored into our pricing models and we remain confident of driving appropriate margin expansion in 2021.”

The program includes an increase in catastrophe capacity to $US3.4 billion ($4.4 billion) from $US3.3 billion ($4.3 billion).

The catastrophe aggregate limit is unchanged at $US500 million ($654 million) and attaches at $US625 million ($817 million) compared to $US545 million ($713 million) previously, with the per occurrence deductible doubling to $US10 million ($13 million).

QBE has also announced its own reinsurance operations have been centralised and are now managed in London under Steve Postlewhite.

The change means results of QBE’s North American inward reinsurance business will be included in the QBE Re results, which is part of the International segment.

IAG has maintained its gross reinsurance protection cover at up to $10 billion for this calendar year, before quota share impacts.

The insurer has reported a modest increase in reinsurance rates, but says the overall outcome is in line with expectations.

After allowing for quota share arrangements, its maximum Australian first event retention remains $169 million, while for a second event it has increased to $169 million from $135 million last year, and for a third event it has risen to $34 million from $17 million.