On Friday, shares of Insurance Australia Group rose by 9% after the company secured reinsurance protection from subsidiaries of Berkshire Hathaway and Canada Life Reinsurance to reduce financial volatility over the next five years.
The insurer's shares surged as much as 9.3%, reaching AUD 7.280 at 0049 GMT, the highest level since January 24, 2020. Its stock became the top performer in the benchmark S&P/ASX 200 index.
The Sydney-based insurance company stated that these agreements would provide up to AUD 680 million (USD 451.86 million) in additional protection annually, totaling up to AUD 2.8 billion over five years.
IAG noted that this reinsurance would effectively help cap the fiscal year 2025 natural disaster costs at AUD 1.28 billion.
Nick Hawkins, Managing Director and CEO of IAG, stated that these agreements would "provide customers with more certain natural disaster insurance costs, stabilize earnings, and reduce capital requirements."
The comprehensive insurance company confirmed its full-year insurance profit and margin targets, and expects to reach the upper end of its forecast range.
