Australia’s IAG expects $280m claims for natural disasters

Australian insurance group says it has received thousands of claims related to deadly bushfires that are still burning.

NSW Firefighters On High Alert Ahead Of New Year''s Eve Fireworks Display
Dangerous bushfires have been raging across southern Australia, destroying homes and affecting thousands of residents and volunteers [File: Sam Mooy/Getty Images]

Insurance Australia Group Ltd (IAG) on Friday estimated net claim costs from natural disasters at 400 million Australian dollars ($279m) for the first half of fiscal 2020 in the wake of a deadly season of bushfires in the country.

Australia‘s largest insurer said it had received more than 2,800 bushfire-related claims since the start of September 2019, adding that more than 1,500 of these were lodged since the start of December 2019 and related to residential properties.

Bushfires so far this season have scorched more than 4 million hectares (10 million acres) of bushland and destroyed more than 1,000 homes, including 381 homes destroyed on the south coast just this week.

Another death from the fires in the state of New South Wales (NSW) was confirmed on Friday, taking the toll there this week to eight. Two people have died in the state of Victoria’s fires, and 28 others are unaccounted for.

Evacuations are continuing, with the Australian navy currently ushering away some of the thousands of people stranded on the east coast as a searing weather front was set to whip up more blazes across Victoria and NSW.

Out of the 400 million Australian dollars of the claim costs it expects for the six months ended December 31, 2019, overall bushfire events are likely to account for more than 160 million Australian dollars ($111m), IAG said.

In comparison, the insurer had logged higher net natural peril claim costs of 414 million Australian dollars ($280m) in the first half of 2019, a sharp uptick from the year earlier due to higher claims from a hailstorm in Sydney.

The company said the perils estimates for the period included three continuing bushfire events, but added it has limited the impact of those fires on its profits through its reinsurance programme.

IAG separately said it had raised its catastrophe reinsurance programme for the 2020 calendar year to 10 billion Australian dollars ($7bn) from 9 billion Australian dollars ($6.3bn) last year.

Source: Reuters