IAG has updated its FY21 natural perils claim costs following the storm damage and severe flooding that devastated South East Queensland (QLD) and northern New South Wales (NSW) on March 16.
IAG had received around 8,000 claims as of 4pm on March 25, which was expected to rise further. The claims were predominantly for property damage.
Based on exposure, claims lodged to date, and experience with previous similar events, IAG expects the net cost of the extreme weather event to reach around $135 million ($200 million pre-quote share) – capped at $169 million, the Maximum Event Retention (MER) for a first event under the 2021 catastrophe reinsurance program.
Commenting on the Australia floods, IAG chief executive officer and managing director Nick Hawkins said: “We’re working hard providing support to customers and communities affected by flooding. Our teams are on the ground supporting customers in the worst impacted areas of the NSW
Mid North Coast, Western Sydney, and South East QLD, assessing the damage to our customers’ homes, ensuring their properties are safe, and arranging temporary accommodation for those who need it.
“Our dedicated major events team is managing claims from this event, and we have increased our call centre capacity to help affected customers lodge claims as soon as possible. All our NRMA
Insurance branches in the impacted areas are open to support customers, and we have deployed a claims team to the NRMA Port Macquarie branch to provide face-to-face support for those lodging claims.”
IAG’s net natural perils claim costs for the eight months to February 28, 2021, were around $375 million following relatively benign perils activity this financial year before the March event.
Following the March event, and taking into account seasonally lower perils costs that typically occur in the June quarter, IAG expects FY21 net natural perils claim costs to reach around $660 million to $700 million, which is marginally higher than the perils allowance of $658 million for this period. This assumes an estimated $150 million to $190 million for further peril events in March to June 2021.
