IAG reveals bushfire pain

Insurer expects $400m disaster hit

IAG says it expects to pay out roughly $400 million in natural peril claims for the six months to December 31, more than half of its $641 million natural peril allowance for the fiscal year.

The insurance giant said it had received more than 2800 bushfire-related claims since the beginning of September, mostly related to residential properties, including 1500 claims since the start of December.

With 32.5 per cent of its bushfire claims covered by reinsurance, IAG estimates that the ongoing Australian bushfires will cost it roughly $160 million in claims.

The other significant natural perils events for the first half included big hailstorms in November on the Sunshine Coast and in Timaru in the South Island of New Zealand. IAG says it expects the bushfires to worsen over the coming weekend and Australia division chief executive Mark Milliner said assessors and claims teams were on standby to support customers when it was safe to enter burnt areas.

“Our claims teams are identifying and calling those customers potentially impacted when appropriate, while our dedicated major event claims teams are contacting customers as soon as claims are lodged,” Mr Milliner said yesterday.

“We encourage our customers to make contact at the earliest opportunity if they need to lodge a claim, access emergency accommodation or request other assistance.”

IAG also said it was upping its reinsurance protection this year from $9 billion to $10 billion, giving the insurer more coverage in the event of a single mega-catastrophe such as another big earthquake in New Zealand.

IAG would be responsible for the first $250 million in such an event and its reinsurers would pay up to $10 billion in claims.