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BRIEF-Insurance Australia Group Enters Agreements To Quota Share 12.5 Pct Of Its Business
December 7, 2017 / 10:26 PM / 11 days ago

BRIEF-Insurance Australia Group Enters Agreements To Quota Share 12.5 Pct Of Its Business

Dec 8 (Reuters) - Insurance Australia Group Ltd:

* IAG IMPROVES CAPITAL EFFICIENCY AND REDUCES EARNINGS VOLATILITY

* ENTERED INTO THREE AGREEMENTS TO QUOTA SHARE A COMBINED 12.5% OF ITS CONSOLIDATED BUSINESS FROM 1 JANUARY 2018

* INSURANCE AUSTRALIA GROUP - ‍FROM 1 JAN 2018, REINSURERS TO RECEIVE COMBINED 12.5% OF CO‘S CONSOLIDATED GROSS EARNED PREMIUM

* DEAL WITH REINSURERS MUNICH RE, SWISS RE AND HANNOVER RE COVER IAG‘S BUSINESS IN AUSTRALIA, NEW ZEALAND AND THAILAND

* IAG WILL RECEIVE AN EXCHANGE COMMISSION WHICH RECOGNISES VALUE OF ACCESSING IAG‘S STRONG CORE FRANCHISE

* INSURANCE AUSTRALIA GROUP -AGREEMENTS EXPECTED TO DELIVER REDUCTION IN REGULATORY CAPITAL REQUIREMENT OF ABOUT $435 MILLION,OVER A 3-YEAR PERIOD

* DEALS BROADLY NEUTRAL EPS AND ROE EFFECTS, PRIOR TO CONSIDERATION OF POTENTIAL CAPITAL MANAGEMENT IMPACTS

* ‍COMBINED 12.5% QUOTA SHARE AGREEMENTS WILL HAVE NO EFFECT ON 1H18 RESULTS FOR SIX MONTHS ENDED 31 DECEMBER 2017​

* CO HAS RAISED ITS FY18 REPORTED INSURANCE MARGIN GUIDANCE BY 125 BASIS POINTS, TO 13.75% - 15.75%​

* FY18 NATURAL PERILS ALLOWANCE REDUCES TO $627 MILLION

* ‍INTENDS TO MAINTAIN ITS CET1 RATIO WITHIN ITS TARGETED BENCHMARK RANGE​

* DEALS EXPECTED TO RESULT IN IAG‘S INSURANCE PROFIT BEING BROADLY UNCHANGED

* DEALS ANTICIPATED TO ENHANCE IAG‘S REPORTED INSURANCE MARGIN BY APPROXIMATELY 250 BASIS POINTS PER ANNUM.

* DEALS HAVE AN AVERAGE INITIAL PERIOD OF MORE THAN FIVE YEARS. Source text for Eikon: Further company coverage:

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