Fitch Ratings has indicated that proposed reforms by the Australian Prudential Regulation Authority (APRA) to reinsurance-related capital requirements could positively impact the credit profiles of Australian general insurers by enhancing their access to reinsurance protection. These changes include mandating all-perils reinsurance coverage and reducing reinstatement requirements set to take effect in June 2026. However, Fitch cautioned that increasing catastrophe reinsurance costs, driven by severe weather events, and insurers’ internal risk appetites may limit the reforms’ effectiveness on retention rates. The agency believes that expanded reinsurance options could help insurers manage their exposure more effectively and maintain healthier credit profiles.
