Insurance Australia Group (IAG) has expanded its gross reinsurance protection to $10 billion for the 2020 calendar year, up from the previous year’s $9 billion, and revealed its net natural peril claims costs for the FY20.
“We have also increased the multi-year arrangements we have with some of our largest reinsurance counterparties,” said Nick Hawkins, IAG’s chief financial officer. “Combined with our existing quota share arrangements, this means around 70% of our gross main catastrophe program for calendar 2020 is protected by multi-year coverage, providing greater certainty of future reinsurance cover.”
IAG said that as of Jan. 02, it had received more than 2,800 claims due to the sequence of bushfire events since September across a number of states, exacerbated by prolonged drought and extreme weather conditions. A majority of the claims relate to residential properties.
Net natural peril claims costs for the six months ending Dec. 31 are anticipated to reach roughly $400 million post-quota share, compared to a corresponding perils allowance of $320 million.
Read more: IAG ups catastrophe reinsurance cover by $1 billion
More than $160 million of net claims costs in 1H20 are expected to come from overall bushfire events, post-quota share. Also contributing to the insurer’s natural peril claims costs are the significant hailstorm events on the Sunshine Coast in Queensland and at Timaru in the southern Canterbury region of New Zealand, both of which occurred in November 2019.
IAG will report its results for the first half of the 2020 financial year on 12 February 2020.
