The Australian Reinsurance Pool Corporation has purchased a retrocession limit of $2 billion for its terrorism program this year following extensive engagement with global reinsurance markets.

The limit is down from $2.15 billion a year ago, and the deductible has increased to $500 million from $350 million.

The corporation met with 35 reinsurers across Australian and international markets as part of the renewal process, and the program includes a diversified panel of providers.

CEO Christopher Wallace says retrocession is a prudent risk management tool that helps protect the balance sheet and maintain confidence in the scheme.

“We purchase private reinsurance where it represents value for money and supports the long-term sustainability of the pool,” he said.

“The 2026 placement reflects a disciplined approach in current market conditions.”

The ARPC says the program reflects an assessment of portfolio risk, reinsurance market conditions and the protection provided by its Commonwealth guarantee, while aligning with recent legislative amendments expanding the scheme to include state-sponsored terrorism.

The terrorism pool’s claim funding layers include the ARPC’s accumulated net assets and the $10 billion Commonwealth guarantee.

As of last June 30, the pool had a capacity of about $13.7 billion. Last financial year, insurers paid $413 million in premiums.