Reinsurance in Australia, Key Trends and Opportunities to 2018

Date: 2015-09

“Australia is prone to natural disasters such as floods, cyclones, earthquakes, bushfires and storms. With such an increase in catastrophic events, Australia recorded an increased reinsurance rates ranging from 50–75% during 2011 and 2012. There were eight natural disasters in 2010, of which five were floods, a tropical cyclone and two major storms. The Queensland flood was the worst of these, which occurred in December 2010. The total reinsurance accepted recorded a review-period compound annual growth rate (CAGR) of 3.7%. The reinsurance ceded by the insurers grew at a review-period CAGR of 2.4%. Non-life insurance is the largest category, ceding 30.5% in 2013, followed by life insurance with 8.1% and personal accident and healthcare insurance with the remaining 4.0%.
The Terrorism Insurance (TI) Act 2003 is enacted by the Australian government after the insurers withdrew coverage for damages caused by terrorism, following the September 11, 2001 attacks on the US. The Australian Reinsurance Pool Corporation (ARPC), a statutory authority, was established under this act. Its role is to establish and provide reinsurance for insurers who claim risk of terrorism losses.”

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