IAG keeps catastrophe cover at $7 bln


Insurance Australia Group has maintained its protection against major disasters in 2016 at $7 billion.

The insurer behind brands such as NRMA and CGU said its protection against catastrophes reflects a stable overall aggregate exposure, with modest growth in the underlying business being offset by reduced exposure to large-corporate property.

Renewal rights to IAG's large-corporate property book, which carries a relatively heavy reinsurance requirement, have passed to Berkshire Hathaway.

Last June, IAG struck a 10-year partnership with Warren Buffett's Berkshire Hathaway, with the US conglomerate taking a $500 million stake in the insurer.

Under the partnership, Berkshire Hathaway will receive 20 per cent of IAG's gross written premium and pay 20 per cent of its claims for the next decade.

IAG's 2015 financial year profit had slipped 40 per cent after a blowout in natural peril claims.