Australia’s terrorism insurance scheme administrator, Australian Reinsurance Pool Corporation, has renewed its retrocession reinsurance program for the 2019 calendar year. The $3.315 billion retrocession reinsurance program, plus ARPC’s net assets and the $10 billion Commonwealth guarantee, provides scheme capacity in the event of a declared terrorism incident, against commercial and eligible property assets of more than $13.7 billion.
“ARPC’s retrocession program encourages the global insurance market to participate in providing terrorism cover for Australian-based assets, which protects the Commonwealth (Australian Government) guarantee and Australian taxpayers,” said Dr Christopher Wallace, ARPC Chief Executive.
“ARPC achieved a slight reduction in pricing for the 2019 retrocession program,” Dr Wallace said. “The price reduction, plus reinsurers’ appetite to participate, prompted ARPC to purchase an additional top layer of $250 million for 2019,” he said.
The $3.315 billion retrocession program and ARPC net assets are the first layers of funding for claims in the event of a terrorism incident.
Dr Wallace and Chief Underwriting Officer, Michael Pennell, met with almost 70 reinsurers in key global markets to negotiate the 2019 program.
“ARPC remains well positioned to be an effective provider of terrorism risk insurance that facilitates market participation, supports national resilience and reduces potential losses arising from terrorism catastrophe.” said Dr Wallace.
For media inquiries, please contact ARPC CEO Dr Christopher Wallace on (02) 8223-6777.
Australian Reinsurance Pool Corporation is a corporate Commonwealth entity established under the Terrorism Insurance Act 2003 (TI Act). Following the terrorist events in the United States on 11 September 2001, there was a global withdrawal of terrorism insurance. The Government was concerned that the lack of comprehensive insurance cover for commercial property or infrastructure would lead to a reduction in financing and investment in the Australian property sector. The role of ARPC was to establish and provide ongoing administration of a scheme that would provide insurance cover for eligible terrorism losses, involving commercial property, associated business interruption losses and public liability.