The Australian Reinsurance Pool Corporation (ARPC) has increased this year’s retrocession cover to $2.9 billion from $2.6 billion last year, and its excess has been reduced to $350 million from $400 million.

The renewal terms were reached with almost 60 reinsurers in key global markets, the ARPC says.

“ARPC remains well positioned to protect Australian businesses and the wider Australian economy from economic losses in the event of a declared terrorist incident,” CEO Chris Wallace said.

“The benefits of our retrocession program include increased scheme capacity to handle large terrorist events, greater sharing of Australia’s terrorism risk with private sector insurers and reinsurers and less risk for the Federal Government and Australian taxpayers.”

The pool’s overall reinsurance capacity of $13.4 billion includes the $10 billion Commonwealth guarantee, $500 million of ARPC capital and the $2.9 billion retrocession program.

The ARPC administers the scheme, which was established in 2003 amid a global withdrawal of terrorism insurance after the September 11 2001 attacks on the US.