AIG shrinks aggregate reinsurance to $2.05bn, but lowers attachment

AIG shrinks aggregate reinsurance to $2.05bn, but lowers attachment

American International Group (AIG) has lowered its aggregate reinsurance towers limitation to $2.05 billion for 2021, below $2.5 billion in 2020. The 18% reduction in limitation for AIGs aggregate reinsurance tower is not the entire photo though, as the international carrier has actually also reduced the bottom-end too, with the aggregate residential or commercial property disaster reinsurance protection set to connect excess of $500 million for 2021, below the $750 million accessory this aggregate tower had in 2020.
Its one of a range of modifications to AIGs residential or commercial property disaster reinsurance program at the January 2021 renewals, detailed in the providers 10K which was released Friday.
AIG has actually also decreased the accessory for its U.S. per-occurrence disaster reinsurance, which will now attach excess of $200 million, or excess $500 million for Southeast United States and Gulf State Named Storm losses, below a $500 million standard accessory in 2020.
Protection for the North America high net book of business is also down for 2021, at $1.275 billion of per-occurrence reinsurance, below $1.525 billion in 2020.
Per-occurrence reinsurance for Japan and the rest of the world stays the very same as 2020, however the shared aggregate limit for those areas is naturally down in line with its primary aggregate.
The result of these modifications is that, in spite of the reduction in limitation, AIGs aggregate retention for any disaster events, after the impact of the per event deductibles, is $750 million for 2021, down from $1 billion of retention a year previously.
AIG has also raised the home catastrophe retrocession cover of its Validus Re unit, with $475 million of limitation excess $300 countless retention from global direct exposure via an aggregate excess of loss cover for 2021, up from $400 million.
Validus also benefits from capital markets backed retrocessional reinsurance, with its multi-year industry loss index Tailwind Re Ltd. (Series 2017-1) disaster bond.
The Tailwind cat bond develops at the end of 2021, implying there is every possibility AIG returns to the insurance-linked securities (ILS) market this year to restore this piece of its reinsurance arrangements.
Likewise check out: Zaffino highlights crucial evolution of AIG reinsurance program at 1/1.
Check out all of our reinsurance renewals news here.

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