Reinsurance Explained: A Pillar of Strength for General Insurers

In Reinsurance Explained: A Pillar of Strength for General Insurers, Chief Actuary Kate Bible outlines why reinsurance matters to every Australian consumer and how recent global changes are reshaping the landscape.

In brief

• Spending an estimated AUD 2.5 billion on reinsurance last year saved general insurers from needing up to AUD 70 billion in extra capital to cover natural disasters and other losses.
• Secondary perils — severe thunderstorms, floods, droughts, wildfires and landslides — now cause more total global damage than primary perils such as hurricanes and earthquakes.
• Climate change, population growth and rising rebuilding costs are fundamentally reshaping insurance costs across the industry.
• Compared to their global peers, Australian insurers have fewer reinsurance options that receive regulatory credit, with APRA currently consulting on expanding access to alternative solutions.

Why this matters now

With global insured losses from natural disasters reaching USD 145 billion in 2024, and Australia experiencing AUD 8.3 billion in insured losses understanding how reinsurance works has never been more critical for consumers, policymakers and industry professionals.

Download the report