IAG (ASX:IAG) provides claims update after severe floods

Company News

by Lauren Evans

IAG (ASX:IAG) said it remains focussed on supporting customers affected by the severe storms and flooding in south-east Queensland and NSW. 

By 6am this morning, IAG had received around 24,000 claims, including around 3,500 claims from the widespread flooding which occurred across Sydney over the last three days.

The company said the weather is still affecting the eastern seaboard and given limited access to impacted areas, it is too early to determine the number of claims, which are expected to rise further over the coming days.

"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,” said chief executive officer Nick Hawkins.

IAG’s reinsurance protection means it will incur a net claims cost of around $74 million from the flooding that commenced in February, lower than the $95 million estimate disclosed on March 1 this year. IAG has utilised around $95 million of the $236 million of aggregate cover following this event.

Following February's event, IAG has increased its expectation for FY22 net natural perils claims costs to around $1.1 billion, compared to the previous estimate of $1.04 billion.

IAG reaffirms the FY22 reported margin guidance range of 10 to 12 per cent. Following the increase in estimated net natural perils claims costs, IAG said a result in the lower half of the guidance range is now more likely.

“As well as supporting people through the immediate recovery period, we need to ensure we rebuild communities and infrastructure stronger, so we can help prevent this level of destruction happening again."

After allowing for quota share arrangements, the combination of all catastrophe covers results in IAG having a maximum event retention of $34 million.

Shares in Insurance Australia Group (ASX:IAG) are trading flat at $4.26. 

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