IAG Enhances Reinsurance Strategy with RACQI Integration in 2026

Following the acquisition of RACQI on 1 September 2025, IAG has incorporated the business into its main catastrophe cover, whole-of-account quota share arrangements, and aggregate stop-loss protection. This integration enhances IAG's reinsurance coverage, providing main catastrophe cover for two events of up to $10 billion, attaching at $500 million. The structure aligns with IAG's 2025 catastrophe program, with slight adjustments to accommodate the new acquisition.

RACQI's standalone quota share arrangements have been replaced by IAG's whole-of-account quota share program, increasing the total proportion ceded by 2.5% to 35% of IAG's consolidated business. Additionally, RACQI has been incorporated into the multi-year aggregate stop-loss protection, offering around $1 billion of annual downside protection against natural perils through to the 2029 financial year.

William McDonnell, IAG's Chief Financial Officer, expressed satisfaction with the integration, stating, "We are pleased to have integrated the RACQI business into the overall reinsurance program, which will achieve the targeted synergies." He also noted that improved global reinsurance markets during 2025 allowed for favourable renewal of reinsurance protection, further reducing earnings volatility.

For SMEs, this development signifies a strengthened and more resilient insurance provider landscape. IAG's enhanced reinsurance strategy may lead to more stable and comprehensive coverage options, benefiting businesses seeking reliable office insurance solutions. Staying informed about such industry developments can aid SMEs in making informed decisions regarding their insurance needs.