Insurer expects bigger costs from a summer of wild weather
Insurance Australia Group has raised its cost estimate for severe weather this financial year after storms and hail damaged several states, including south-east Queensland, last month.
An example of the damage caused by wild storms, at Karana Downs in October last year. (Photo: Supplied, QFES)
IAG on Tuesday increased its claim cost forecast for what it calls “natural perils” from $765 million to $1.04 billion, having already increased the allowance significantly on the prior year.
Customers have already made about 14,000 claims following the storms and hail which ravaged South Australia, Victoria and south-east Queensland last week.
Volunteers have been deployed from other states to help provide emergency repairs and temporary accommodation.
More claims are expected, but IAG’s cost for the storms will be capped at $169 million.
Reinsurers will cover the remainder.
Natural peril claim costs for the first four months of the financial year have exceeded expectations by $280 million.
Insurers have often called on governments to do more about climate change as the industry bears the cost of damage.
IAG provides home and motor insurance across brands including CGU, NRMA, SGIC, SGIO and Swann.
In August, IAG posted a full-year loss after tax of $427 million, partly due to businesses claiming coronavirus damage.
On Tuesday, shares in the company on the ASX fell to their equal lowest value in six months, $4.47.
They were down 5.79 per cent to $4.56 at 1449 AEDT.
