IAG Secures Long-Term Reinsurance Agreements

IAG long-term reinsurance (NZX: IAG) has entered into two significant long-term reinsurance agreements with global reinsurers Berkshire Hathaway and Canada Life Reinsurance to reduce earnings volatility and improve financial stability. These agreements provide protection against natural perils and adverse development cover for long-tail risks, expected to yield a capital benefit of approximately NZ$350 million.

The five-year natural perils reinsurance deal, effective July 2024, offers up to NZ$680 million of annual protection, capping FY25 net natural perils costs at NZ$1,283 million in most scenarios. This initiative aims to stabilize earnings and reduce capital requirements. IAG's Managing Director and CEO, Nick Hawkins, highlighted the agreements as a crucial part of the company's strategy to enhance resilience. IAG remains on track to achieve FY24 Reported Insurance Profit and Margin at the upper end of its guidance ranges.

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