The Australian Terrorism Reinsurance Pool, managed by Australian Reinsurance Pools Corporation (ARPC), has purchased A$2 billion in terrorism retrocession limits for calendar year 2026 and has increased deductibles by A$500 million.
ARPC explained that this reflects its current assessment of portfolio risk, current reinsurance market conditions and the protection provided by the $10 billion in federal guarantees under the Terrorism and Hurricane Insurance Act of 2003.
ARPC’s accumulated net assets support the Terrorism Pool, and the 2026 Retro Plan sits on top of its retention and is designed to protect the pool’s net assets in the event of severe but possible losses.
Plans for 2026 include a diverse group of global reinsurers. As part of the renewal process, ARPC met with 35 reinsurers across Australia and international markets.
The ARPC reduces terrorism retrogressions by $2.15 billion through 2025, so the size of the program decreases again in 2026 while deductibles increase.
The 2026 update aligns with recent legislative amendments to expand the program to include state-sponsored terrorism, ensuring ARPC’s risk transfer arrangements reflect the updated coverage.
ARPC CEO Dr Christopher Wallace commented: “Retrocession is a prudent risk management tool that helps protect ARPC’s balance sheet and maintain confidence in the programme.
“We purchase private reinsurance because it provides good value for money and supports the long-term sustainability of the pool. The 2026 placement reflects a disciplined approach in current market conditions.”
