Australia-based insurer IAG has announced the extension of its 2.5% whole-of-account quota share arrangement with Hannover Re.

The renewed deal is already in effect and is valid for five years.

It has allowed IAG to have up to A$169m ($113m) of event retention for a first and second event.

In addition, IAG revealed that it has bought aggregate and third/fourth event reinsurance covers for the financial year 2024 (FY24) ending 30 June.

The FY24 aggregate cover offers A$250m protection in excess of A$600m while individual qualifying events are fixed at A$200m in excess of A$50m per event.

IAG has also bought third and fourth event financial year occurrence covers to offer A$150m of protection for events requiring more than A$200m.

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By GlobalData

The covers have been set to 67.5% to highlight IAG’s whole-of-account quota share deals.

IAG chief financial officer Michelle McPherson said: “IAG has now renewed all four whole-of-account quota share reinsurance arrangements with leading global reinsurers.

“The 32.5% quota share arrangements are an important part of IAG’s capital structure, providing certainty for the next five to seven years.”

“The quota share arrangements have been renewed providing materially consistent financial outcomes and are particularly valuable in a challenging reinsurance market. These arrangements cover 32.5% of all gross claims costs, meaning we are only required to purchase 67.5% of the main catastrophe programme in global reinsurance markets.”

The latest development comes shortly after IAG’s Intermediated Insurance Australia subsidiary CGU Insurance announced the beginning of its collaboration with ANZ to provide its retail banking clients with general insurance solutions.