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UPDATE 1-Insurance Australia Group expects hailstorm claims to hurt margin

Published 24/01/2020, 09:50 am
UPDATE 1-Insurance Australia Group expects hailstorm claims to hurt margin
IAG
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ICAG
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(Adds details on hailstorm, background)

Jan 24 (Reuters) - Insurance Australia Group IAG.AX on Friday cut its full-year outlook for insurance margin, mainly due to claims from hailstorms in Melbourne, Canberra and Sydney in January.

Australia's largest insurer expects a pre-tax cost of A$169 million ($115.58 million) from the claims and said it had received over 28,000 claims relating to the hailstorm as of Jan. 23.

Cricket ball-sized hail stones smashed car windows in Canberra, the national capital, just weeks after authorities urged residents of the city to stay indoors as bushfire smoke left the air among the most toxic in the world. insurer also raised its net natural peril claim costs for 2020 by A$74 million to A$715 million, assuming no further major events up to June 30.

Earlier this month, IAG (LON:ICAG) pegged net claim costs from natural disasters at A$400 million for the first half of fiscal 2020 in the wake of a deadly season of bushfires in the country.

On Friday, the insurer said it expects 2020 insurance margin guidance in the range of 14.5%-16.5%, compared with the previously advised 16%-18%.

The company also said its first-half results will include a net post-tax provision of about A$80 million for customer refunds.

($1 = 1.4622 Australian dollars)

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