IAG to pay out $180 mil­lion for Cy­clone Oswald dam­age

In­sur­ance Aus­tralia Group Ltd says it ex­pects claims of up to AU$175 mil­lion ($180 mil­lion) from the floods and fires that have swept through the coun­try this year.

The in­surer re­ported that it had re­ceived 13 700 claims, ex­pected to cost be­tween AU$120 mil­lion ($123.4 mil­lion) and AU$140 mil­lion ($144 mil­lion) from cus­tomers af­fected by ex-Trop­i­cal Cy­clone Oswald, the deadly storm which rav­aged the coun­try’s east coast last month. IAG has also re­ceived about 600 claims for around AU$35 mil­lion ($36 mil­lion) from bush­fires in the south­ern states. Deutsche Bank in­sur­ance an­a­lyst, Kieren Chidgey, says that IAG’s catas­tro­phe costs for the sec­ond half of fis­cal 2013 had reached about $155 mil­lion to $175 mil­lion, which was roughly half of the group’s sec­ond-half al­lowance of $320 mil­lion. UBS in­sur­ance an­a­lyst James Coghill be­lieves IAG’s $640 mil­lion full-year al­lowance for the 2013 fi­nan­cial year “re­mains ad­e­quate”.

Ri­val in­surer Sun­corp re­ceived around 23 000 claims from Oswald. Sun­corp says its 30 per cent quota share ar­range­ment on the Queens­land home in­sur­ance port­fo­lio would help limit the net claims costs to be­tween AU$200 mil­lion ($205.7 mil­lion) and AU$220 mil­lion ($226 mil­lion).

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