Australia’s terrorism reinsurance pool, administered by Australian Reinsurance Pool Corporation (ARPC), has purchased a reduced terrorism retrocession limit of $2 billion, with an increased deductible of $500 million, for the 2026 calendar year.
ARPC explained that this reflects its current assessment of portfolio risk, prevailing reinsurance market conditions, and the protection provided by the $10 billion Commonwealth guarantee under the Terrorism and Cyclone Insurance Act 2003.
ARPC’s accumulated net assets support the terrorism pool, and the 2026 retro program sits above its retention, designed to protect the pool’s net assets in severe but plausible loss scenarios.
The 2026 program includes a diversified panel of global reinsurers. The ARPC met with 35 reinsurers across Australian and international markets as part of the renewal process.
For 2025, ARPC secured a reduced $2.15 billion of terrorism retro, so the size of the program has come down again for 2026, while the deductible has increased.
This 2026 renewal aligns with recent legislative amendments to expand the scheme to include state-sponsored terrorism, ensuring ARPC’s risk transfer arrangements reflect the updated scope of coverage.
Dr Christopher Wallace, Chief Executive, ARPC, commented, “Retrocession is a prudent risk management tool that helps protect ARPC’s balance sheet and maintain confidence in the scheme.
“We purchase private reinsurance where it represents value for money and supports the long-term sustainability of the pool. The 2026 placement reflects a disciplined approach in current market conditions.”
