IAG’s margins will be squeezed about two percentage points due to some $170 million in insurance claims from Cyclone Debbie.
The insurer says it has so far received about 4,300 claims for mainly property damage, increasing expected full year natural peril costs to $850 million from $680 million.
As a result, IAG has lowered its full year reported insurance margin guidance range, to between 10.5% and 12.5% from 12.5% to 14.5%.
A short time ago, IAG shares were down 1.4% to $5.885.
Cyclone Debbie crossed the Queensland coast near Airlie Beach on March 28, bringing destructive winds, heavy rain and flooding to Queensland and northern NSW.
“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,” says Peter Harmer, IAG’s CEO.
“Our immediate concern is for our customers and their communities and we have our people and partners on the ground in the affected areas to make sure they feel supported and safe.
“We have mobilised local builders to perform critical repairs where we have access, and we have our people at the recovery centres in the affected areas.”
The Insurance Council of Australia says 7500 claims have been lodged from Queenslanders.
It expects insurance losses could reach into the hundreds of millions of dollars as householders and businesses return to their properties and lodge claims.
Cyclone Oswald in 2014 caused insurance losses of almost $1.2 billion.