The Federal Government’s Australian Reinsurance Pool Corporation (ARPC), which administers the terrorism reinsurance scheme, has increased its retrocession cover.

The total capacity has increased by $200 million to just under $3 billion for 2013.

But the cost has stayed approximately the same at $80 million, ARPC Manager, Client Service and Reinsurance, Michael Pennell told insuranceNEWS.com.au.

“We’re always trying to maximise the capacity we can buy for the same amount to increase value,” he said.

The pool attributes the increased value to transparent underwriting information and world-leading modelling facilities.

The cover has been placed with more than 50 reinsurers globally. Priority is given to APRA-regulated companies and those with high financial ratings.

The retrocession scheme was introduced in 2009 and has increased each year. The pool says this program encourages the return of the commercial terrorism insurance and reinsurance market for Australian risks, increases the overall capacity of the scheme and helps minimise the risk of terrorism losses being payable by the Commonwealth.

The ARPC was established in 2003 in response to the September 11 2001 attacks on the US World Trade Centre, after which terrorism cover became generally unavailable.