Federal terrorism exposure cut by $2.3 billion retrocession deal
The Federal Government has scored a $2.3 billion retrocession package for its terrorism insurance scheme that is expected to help attract private reinsurers back to the Australian market.
The Australian Reinsurance Pool Corporation (ARPC) has arranged retrocession cover to insure exposure in excess of $300 million. It sourced the cover from markets in Australia, Europe, Lloyd’s and Bermuda.
The cover effectively reduces the Government’s potential exposure in the event of a terrorist attack.
ARPC CEO Neil Weeks told insuranceNEWS.com.au the deal “is a further step” in attracting private reinsurers after capital fled the market in the wake of the US terrorist attacks of 2001.
“We still find some reticence toward insuring individual insurance portfolios,” he said.
A recent investigation by the ARPC revealed global capacity is returning for national pooled arrangements, but there is still little capacity at reasonable prices for individual risks.
The APRC is a statutory corporation established in 2003 under the Terrorism Insurance Act to administer the Government’s terrorism insurance scheme. It provides reinsurance cover for terrorism risk relating to commercial property and infrastructure.
The next Government review of the scheme is due in July.
The Australian Reinsurance Pool Corporation (ARPC) has arranged retrocession cover to insure exposure in excess of $300 million. It sourced the cover from markets in Australia, Europe, Lloyd’s and Bermuda.
The cover effectively reduces the Government’s potential exposure in the event of a terrorist attack.
ARPC CEO Neil Weeks told insuranceNEWS.com.au the deal “is a further step” in attracting private reinsurers after capital fled the market in the wake of the US terrorist attacks of 2001.
“We still find some reticence toward insuring individual insurance portfolios,” he said.
A recent investigation by the ARPC revealed global capacity is returning for national pooled arrangements, but there is still little capacity at reasonable prices for individual risks.
The APRC is a statutory corporation established in 2003 under the Terrorism Insurance Act to administer the Government’s terrorism insurance scheme. It provides reinsurance cover for terrorism risk relating to commercial property and infrastructure.
The next Government review of the scheme is due in July.