A specialist reinsurance company set up to provide reinsurance cover for terrorism losses has recorded $55 million in premiums in its first year – without any claims.

The Australian Reinsurance Pool Corporation (ARPC) was set up last year in response to the September 11 attacks in the United States, after many insurance and reinsurance companies withdrew terrorism insurance. The ARPC is a statutory authority established under the Terrorism Insurance Act 2003. The Act renders ineffective any terrorism exclusion clauses in eligible insurance contracts in relation to loss or liabilities from a declared terrorist incident affecting eligible property in Australia.

The ARPC’s first annual report records $55.8 million in premiums and more than $500,000 earned on investments. CEO Neil Weeks says 90.3% of total premium was received from Australian-based insurers. The corporation had 187 reinsurance agreements in place at June 30 2004.

The expected premium pool is $300 million, to cover claims from declared terrorist incidents. This is supplemented by a bank line of credit of $1 billion, underwritten by the Federal Government, as well as a Government indemnity of $9 billion.