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1999
Nrma Claims Up To $120m Windfall In Recoveries
Illawarra Mercury
Saturday December 22, 2001
NRMA Insurance Group Ltd (NIGL) expects to reap $90-$120 million in reinsurance recoveries by the end of the year.
The insurance giant said thanks to the continued strength of its underwriting performance, it expects to generate the recoveries from its whole of account aggregate stop loss contract, WAASL.
The WAASL contract provides reinsurance protection that generates recoveries, subject to the contract limits, when the loss ratio of the portfolio it covers exceeds a specified level.
The contract became effective from July 1, 1998, and has a minimum five-year term.
NIGL, which is changing its name to Insurance Australia Group in the new year, said the precise amount of the recoveries would be determined by an actuarial valuation at the end of December.
Newly appointed chief executive Michael Hawker said the extent of the reinsurance recoveries was testament to the strong underwriting performance of NIGL since the contract started in 1998.
``The profit impact is similar to the effect of receiving a rebate on premiums because the underwriting and claims performance of the group has been strong," he said.
Mr Hawker said NIGL was able to estimate with some certainty the likely recovery, based on the premiums to be paid and the historical level of claims.
Shares in NIGL rose 2 to $3.05 yesterday.
© 2001 Illawarra Mercury