Australian primary insurance carrier Suncorp said this morning that it has successfully renewed its reinsurance program for fiscal year 2022, with an unchanged structure and the top of the tower still set at $6.5 billion.
As a result, the fiscal year 2022 reinsurance tower will provide Suncorp with $6.5 billion of protection for its Home, Motor and Commercial property portfolios, across Australia and New Zealand.
A year ago Suncorp underwent a relatively significant restructuring of its reinsurance program arrangements, lowering the top of the reinsurance tower from $7.2 billion to $6.5 billion as its exposure was reduced.
But at the same time the insurer added more aggregate protection, including a $400 million Aggregate Excess of Loss (XoL) cover, placed instead of its previous natural hazards aggregate and stop-loss protections.
The aggregate reinsurance has proven valuable for Australian insurers in recent years, particularly as severe convective storms and flooding, alongside wildfires, caused significant reinsurance recoveries in recent years.
The 2022 reinsurance tower sees Suncorp’s maximum event retention remaining at $250 million and the insurer confirmed there have been no changes to its drop-down aggregate protection and Aggregate Excess of Loss (AXL) treaties at the renewal.
Further detail regarding the structure and format of the program will be included in the FY21 Investor Pack.
For the fiscal year ahead, Suncorp expects its natural hazard allowance to be set at $980 million.
The insurer said its FY 2022 reinsurance program and natural hazard allowance are both in-line with its three-year plan.