The NSW storms and the Sydney hail at the weekend have cut into the margins of Insurance Australia Group (IAG).
The big insurer received the bulk of claims — nearly 30,000 — from the major storms. The Insurance Council says overall insurance losses are estimated at $295 million. So far, there have been a total of 41,500 claims.
The cost to IAG of the storms last week will be $250 million plus another $50 million for the hailstorm in Sydney over the weekend.
IAG has revised its net natural peril claim cost assumption for the current financial year to $1 billion, after reinsurance recoveries, up from $700 million.
And late claims from isolated areas for damage associated with Tropical Cyclone Marcia in February this year are now expected to cost $140 million compared to the expected $60 million to $90 million range.
IAG has revised its full year insurance margin guidance range to 10.5% to 12.5%, down from 13.5% to 15.5%.
CEO Mike Wilkins said the underlying performance of the business remains strong despite the recent series of events.
“As an insurer, managing events like those we have seen in the past few months is part of our normal business activity, but their incidence and size are unpredictable,” he said.
Its shares are trading down 2.7% to $5.73.