Insurance Group Australia (ASX: IAG) has received 24,000 claims to date relating to severe storms and flooding in QLD and NSW, but it is still early days for estimates on the total impact of current flooding in Sydney and much of the eastern seaboard.
The insurer has received 3,500 claims from the NSW capital over the last three days.
Figures released yesterday by the Insurance Council of Australia (ICA) show a spike in claims recently as residents return to properties in flood-stricken areas in NSW, with the trend looking like the total number of claims will almost certainly surpass 100,000 today.
In an ASX announcement today, IAG lifted expectations for its net natural perils claims cost to $1.1 billion in FY22, up around $55 million on previous forecasts.
The insurer also emphasised it had “extensive reinsurance protection in place” and estimated it would incur a net claims cost of approximately $74 million from the flooding events, which is lower than the $95 million estimate on 1 March due to development on previous claims.
“Our communities continue to battle through this extraordinary sequence of weather events and it is distressing to see people suffer through multiple storms and floods up and down the east coast. And there is no doubt this disaster would have been even more tragic without the unwavering dedication of our emergency personnel and of residents looking out for one another,” IAG managing director and CEO Nick Hawkins said.
“We have all hands on deck for our NRMA Insurance, CGU and WFI customers with extra people on the phones and on the ground in devastated areas in Queensland and NSW. Our assessors and repairers have started assessments and emergency make safe repairs in impacted areas and we are securing temporary accommodation for customers who can’t return to their homes.
“The NRMA Insurance helicopter has been in the air supporting the flood response, transporting NSW SES volunteer rescue teams and essential supplies to isolated communities, and providing critical flood intelligence across affected areas.”
IAG reaffirms the FY22 reported margin guidance range of 10-12 per cent, but following an increase in estimated net natural perils claims costs it is likely to be at the lower end of that range.
“After allowing for quota share arrangements, the combination of all catastrophe covers results in IAG having a maximum event retention of $34 million,” IAG said.
The company has utilised approximately $95 million of the $236 million of aggregate cover following this event.
“As well as supporting people through the immediate recovery period, we need to ensure we rebuild communities and infrastructure stronger, so we can prevent this level of destruction happening again,” Hawkins said.
“We urge governments to work with insurers and communities to identify and invest in mitigation and take action to improve land planning and building codes and other resilience measures.
“This needs to be a priority.”
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