Australian primary insurer IAG reported that its natural peril costs and catastrophe losses cost the company $521 million through the first-half of its fiscal year 2024, resulting in an erosion of $250 million of the deductible beneath its aggregate reinsurance cover.
Natural peril costs actually came in below budget for the Australian insurance giant and were slightly down on the prior year.
The biggest contributor to IAG’s catastrophe losses for the first-half of FY 2024 were the Christmas hail and thunderstorms in New South Wales, Queensland and Victoria, at $169 million.
But, while that was the only single catastrophe event that surpassed $100 million for IAG during the period, the aggregation of smaller events causing losses less than $15 million each totalled $200 million for the period.
IAG renewed its aggregate reinsurance cover to provide $250 million of protection, excess of a $600 million retention, with qualifying events capped at $200 million excess of $50 million per event, as previously announced last July.
That structure having a per-event deductible as well, will have helped to reduce the erosion of the retention beneath the aggregate reinsurance considerably.
But, IAG said this morning that the loss activity in the first-half of FY 2024 has still eroded the retention layer beneath the aggregate reinsurance treaty by $250 million, leaving $400 million before the aggregate cover could attach.
In the first-half, IAG said that no catastrophe events triggered recoveries under its main catastrophe program either, which was renewed again for 2024 as we reported in January.
With the $521 million of first-half FY 2024 natural peril costs slightly below budget, IAG has $577 million left for the second half of its 2024 fiscal year to the end of June.
The full fiscal year natural peril budget has been lowered slightly, due to benefits from its reinsurance program renewal and IAG’s entry into the cyclone reinsurance pool.
