Insurance Australia Group has added an extra A$600 million to its multi-billion dollar reinsurance protection this year as the company takes advantage of cheaper cover.
IAG hiked up its reinsurance protection from A$5 billion (NZ$5.44b) in 2013 to A$5.6b this new year.
Finance chief Nick Hawkins said the company had "taken the opportunity of more favourable reinsurance market conditions to bolster key aspects of its catastrophe protection".
IAG, which owns brands such as State, NZI, NRMA and CGU, has a programme that includes main catastrophe cover for losses up to A$5.5b. The group wears the first A$250m of each loss.
The insurance giant will also have a A$100m upper layer earthquake cover for Australia and New Zealand.
IAG, which has a market value of A$13.37b, also has a buy down arrangement that dials down the maximum cost of the first event to A$175m and a second event to A$150m.
The catastrophe reinsurance cover will cover all of the areas which IAG operates, except for India and China. The company has widespread operations across Australia and New Zealand, and in recent years has been busy snapping up stakes in insurers across Asia including Vietnam and Malaysia.
The details of IAG's reinsurance arrangements come less than a month after the company unveiled a $1.85b tilt for rival Wesfarmers Insurance in a move that was widely viewed as a strategic play to wipe out one of its biggest threats.
- © Fairfax NZ News