IAG shrinks reinsurance program slightly for 2025

Australian insurer IAG has successfully placed its catastrophe reinsurance program for 2025, purchasing slightly less protection than in 2024. The program includes a main catastrophe cover for two events up to $10 billion and an unchanged attachment at $500 million.

Notably, aggregate, drop-down, and subsequent event covers are gone compared with last year’s cover.

These have been replaced by long-term natural perils volatility protection, which, in combination with the whole of account quota share (WAQS), provides around $1 billion in additional protection annually and up to $4 billion over the entire five-year period for natural peril event costs under $500 million. This long-term volatility protection was first announced on June 28, 2024.

As you can see from the tower above, IAG’s 2025 catastrophe reinsurance program reflects a strategic shift toward long-term natural perils volatility protection, ensuring greater stability in managing event costs below $500 million.

IAG Chief Financial Officer William McDonnell, commented, “IAG received strong support from
reinsurance partners in placing the annual catastrophe program.

“Reinsurance is a key component of our low volatility strategy providing downside protection against natural perils costs exceeding our FY25 allowance of $1,283 million.”

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