The Australian Reinsurance Pool Corporation (ARPC) has renewed its $3.475 billion terrorism retrocession program after meeting with more than 50 reinsurers online in key global markets to negotiate the cover.

“This year, ARPC worked with our reinsurance advisor Aon to simplify the program by converting it to a full multi-year arrangement and renewing at expiring terms,” CEO Christopher Wallace said.

The program was renewed for the same price as last year, with a $225 million excess, in “an impressive result”, Dr Wallace says.

ARPC’s net assets, retrocession program and a $10 billion Federal Government guarantee provide total capacity of about $14 billion in the event of a declared terrorism incident against commercial and eligible property assets.

The recent triennial review of the Terrorism Insurance Act 2003 found the Government-backed program is still required, but rejected extending its mandate to include cyber-attack property damage.

The review said there was still no viable alternative for insurers seeking terrorism cover at commercially reasonable prices, and recommended the review assessment interval should be increased from three years to five.

Dr Wallace says the retrocession program encourages a mix of global and Australian reinsurers to provide terrorism cover for local assets, transferring the risk and protecting the government guarantee and taxpayers.

“ARPC remains an effective provider of terrorism risk insurance that facilitates market participation, supports national resilience and reduces potential losses arising from terrorism catastrophe,” he said.