ARPC finalises 2026 terrorism retrocession program
16 February 2026
Australian Reinsurance Pool Corporation (ARPC) has finalised its terrorism retrocession program for the 2026 calendar year.
Retrocession is an important element of ARPC’s capital and risk management framework, providing additional protection to the terrorism pool’s net assets in the event of a declared terrorism incident.
For 2026, ARPC purchased a reduced retrocession limit of $2 billion with an increased deductible of $500 million. This reflects ARPC’s current assessment of portfolio risk, prevailing reinsurance market conditions and the protection provided by the Commonwealth guarantee under the Terrorism and Cyclone Insurance Act 2003.
The renewal also aligns with recent legislative amendments expanding the scheme to include state-sponsored terrorism, ensuring ARPC’s risk transfer arrangements reflect the updated scope of coverage.
ARPC Chief Executive Dr Christopher Wallace said the program was placed following extensive engagement with global reinsurance markets.
“Retrocession is a prudent risk management tool that helps protect ARPC’s balance sheet and maintain confidence in the scheme,” Dr Wallace said.
“We purchase private reinsurance where it represents value for money and supports the long-term sustainability of the pool. The 2026 placement reflects a disciplined approach in current market conditions.”
ARPC met with 35 reinsurers across Australian and international markets as part of the renewal process. The 2026 program includes a diversified panel of global reinsurers.
The terrorism pool is supported by ARPC’s accumulated net assets and the $10 billion Commonwealth guarantee. The 2026 retrocession program sits above ARPC’s retention and is designed to protect the pool’s net assets in severe but plausible loss scenarios.
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About retrocession
Retrocession occurs when a reinsurer, such as ARPC, purchases its own reinsurance. This enables very large risks to be spread across multiple reinsurers, enhancing financial resilience.