Perth storms force reinsurance claim to cap costs at A$75m
Australian insurer IAG said that by close of business yesterday (25 March 2010) it had received in excess of 13,500 claims from the 22 March Perth storm forcing it to claim on its catastrophe reinsurance cover, capping the total pre-tax cost of this event at A$75m
AIG is also lowering its full year 2010 insurance margin guidance to 9.5% - 11.0%, from 10.5% - 12.0%. The revised guidance assumes IAG’s natural peril costs in the second half of the financial year will exceed the budgeted $184m allowance by $180m.
Under IAG’s reinsurance arrangements, the claims cost of a subsequent major event this calendar year would be capped at a maximum of $50m.
Vagaries of the weather
IAG managing director and CEO, Michael Wilkins, said: "While the vagaries of the weather have again forced us to refine our full year guidance, I continue to be confident that the fundamentals and underlying performance of our business remain strong. I am proud of our response to the events of recent weeks.”
Dow Jones reports that the Insurance Council of Australia has said the industry has so far received 42,500 claims totalling A$203m for the Perth storm.
This added to an expected cost of A$120m from 7,500 claims related to floods in southwest Queensland, and A$491m from around 79,000 claimants in Victoria. IT warned claims from major natural disasters typically take a number of weeks to be lodged and even longer to be assessed.
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