Victoria weather woes take toll on IAG (ASX:IAG)'s claims register

Company News

by Michael Luu

Damages associated with the recent stormy weather conditions in Victoria have taken a toll on the insurance heavyweight’s expenses, as affected clients have flooded IAG’s claims register.

The Sydney-based insurer has recorded a drastic hike in claim applications, following a period of torrential rainfall and severe floods in the state.

IAG’s customers have lodged an estimated 4300 claims related to the natural disasters, and the number is still projected to increase in the coming time. Property damage constitutes a large proportion of this influx of claim applications.

The upsurge in applications for coverage entitlements has prompted the $12.6 billion insurance company to upgrade its FY21 claim costs guidance by $43 million to $60 million to a range between $720 million and $743 million.

The company has deployed damage inspectors and maintenance personnel to attend damage sites for claim assessment and safety assurance. IAG has advised customers to comply with emergency services’ instructions and take precaution during the inspection process.

Another weight on the owner of NRMA Insurance Group’s damage coverage costs in the quarter was claims derived from Cyclone Seroja-induced problems in Western Australia.

Shares in Insurance Australia Group (ASX:IAG) are trading 0.9 per cent higher at $5.16

Are you a 708 sophisticated investor?

A sophisticated investor is defined under Section 708 of the Corporations Act (net assets of $2.5 million or annual incomes in excess of $250,000).

They are eligible to receive information regarding wholesale investment opportunities that are not available to regular or retail investors.

Please subscribe if you would like to be alerted to these types of opportunities.