IAG to share 12.5% of premiums, claims with Swiss Re, Munich Re, Hannover ReReprints
Insurance Australia Group Ltd. plans to cede 12.5% of its consolidated gross earned premiums and 12.5% of claims and expenses to Munich Reinsurance Co., Swiss Re Ltd. and Hannover Re S.E. starting Jan. 1, 2018, Reuters reported. The arrangement increases the portion of business IAG sells to offshore reinsurers to 32.5%. Peter Harmer, chief executive of IAG, said that the deal removed downside earnings risk from a portion of the business while retaining significant exposure to earnings upside. The agreements will cover business in Australia, New Zealand and Thailand, and cut IAG's regulatory capital requirement by nearly $327 million over three years.