IAG and Suncorp face thousands of claims from Auckland flood disaster
Insurance Australia Group and Suncorp face thousands of claims from the flooding disaster in New Zealand’s largest city, sparking falls in both insurers’ share prices amid fears of mounting natural peril costs.
IAG shares slumped 3.4 per cent on Monday to $4.90, while Suncorp lost 1.8 per cent to $12.58, as both companies updated the market on the number of claims they had received so far for flooding and storm damage around Auckland.
The city has been put into a state of emergency following flash flooding and landslides, with four people losing their lives in the disaster.
IAG chief executive Nick Hawkins said the safety of its customers and communities remained the insurer’s top priority. The company has received more than 5000 claims from New Zealand across its insurance brands AMI, State and NZI. It expects that number to rise in the days ahead.
“The tragic loss of life and the vision of the damage to Auckland is devastating,” Hawkins said in a statement to the ASX.
“Our Major Event Response team has been supporting customers since Friday night, with temporary accommodation and other emergency support. We have a large team ready to help people with their claims, and we will have our assessors on the ground in affected areas as soon as it is safe to do so.”
Suncorp said it had received more than 3000 claims across its Vero and AA Insurance brands, and it also expects that number to rise.
“We are aware more rain is expected in the following days, and that there are reports of damage beyond Auckland,” Suncorp chief executive Steve Johnston said in an ASX announcement.
“Our thoughts are with our New Zealand customers in these difficult times. We encourage them to lodge their claims as soon as it is safe to do so.”
The flooding comes after insurers’ budgets for natural disasters have been repeatedly exceeded in recent years: last year’s East Coast flooding was the most expensive natural disaster for insurers in Australian history.
IAG said it may need to review its estimate for natural peril costs for the current financial year, but it was too early to determine the full impact of the NZ floods. Suncorp said its losses from the disaster would be capped at NZ$50 million, due to its level of reinsurance.
Morningstar analyst Nathan Zaia said investors may be concerned about how the floods might affect Suncorp and IAG’s budgets for disaster costs. “It just leaves them a smaller and smaller buffer for the rest of the financial year,” Zaia said.
Even so, Zaia said he was not overly worried about the risk to insurers from the recent run of natural disasters because they are passing on these risks to consumers through sharply higher premiums.
Most Viewed in Business
Source: Thanks smh.com