IAG lowers 2017 insurance margin guidance after A$140m Cyclone Debbie hit
Insurance Australia Group (IAG) increased its natural peril cost assumption for 2017 and lowered its insurance margin guidance range after Tropical Cyclone Debbie hit Australia’s Northeast.
IAG said that it expects a net natural peril claims cost of approximately A$140 million ($106.0 million) from Tropical Cyclone Debbie.
Debbie crossed the Queensland coast near Airlie Beach as a severe Category 4 cyclone, on the afternoon of Tuesday 28 March 2017. In addition to high winds, the weather system brought heavy rainfall and flooding to a region extending through Queensland and Northern New South Wales, with associated heavy rain experienced in New Zealand.
IAG’s businesses have received approximately 4,300 claims as at April 4, 2017 for mainly property damage in relation to Tropical Cyclone Debbie.
“This is a highly unusual and complex event with the devastating effects still being felt across North and South East Queensland, Northern New South Wales and New Zealand,” said Peter Harmer, IAG CEO.
Following this event, IAG has increased its expectation for full year 2017 net natural peril claim costs to A$850 million from A$680 million.
The $170 million increase in IAG’s net natural peril claim cost assumption for 2017 equates to approximately 200 basis points at the reported insurance margin level. As a result, IAG has lowered its 2017 reported insurance margin guidance range, from between 12.5 percent and 14.5 percent to between 10.5 percent and 12.5 percent.
Today’s top stories
Did you enjoy reading this story? Sign up to our free daily newsletters and get stories like this sent straight to your inbox.