Rain may push claims to $1b
The Bureau of Meteorology issued a severe thunderstorm warning with a risk of flash flooding on Sunday for residents of the Hunter, south coast, northern tablelands and parts of the northern rivers.
It came less than 24 hours after severe winds and rain hit hundreds of homes across Sydney and the Illawarra, leaving towns across eastern NSW battling rising floodwaters.
More than a dozen major or minor flood warnings were issued on Sunday after heavy rain dumped an average of 94 millimetres over the Warragamba catchment in 24 hours.
The latest figures from the insurance industry show claims for NSW, Queensland and Tasmania have jumped $150 million in the past two weeks, pushing the total value of insurance claims this summer above $830 million.
Figures from the Insurance Council of Australia show losses in Queensland have climbed to $661.3 million this year, followed by flood-related losses in NSW of $71.8 million. Tasmanian bushfire claims have risen to $87.1 million, while claims related to bushfires in NSW total $10 million.
Insurers said they were expecting the total value of losses to grow in coming weeks but it was too early to know how many fresh claims will be made after this weekend.
"It's not unusual for [claims] figures to balloon more than a week after [an] actual event," said Campbell Fuller, a spokesman for the Insurance Council. "We're not due to get some more figures until the end of this week."
The severe weather comes as QBE Insurance prepares to publish full-year earnings this week.
Last week, two of the country's biggest insurers - Suncorp and Insurance Australia Group - posted huge jumps in six-month profits.
Suncorp's net profit jumped by close to half, to $574 million, while IAG's profits more than tripled to $461 million.
Insurance analysts said IAG's profit margin, which jumped in the past year from 7.7 per cent to 19.2 per cent, was the best in living memory.
In the same week, IAG, the group behind the NRMA, RACV and CGU insurance brands and the country's biggest insurer of cars and homes, said its home and car premiums could rise by 5 per cent to 10 per cent this year.
For the six months to December 31, the group paid out $133 million on claims.
However, this calendar year, it has so far spent $120 million to $140 million on flood-related claims and $35 million on the bushfire-related claims.
Frequently Asked Questions about this Article…
Yes. According to the article, heavy rain across NSW has pushed industry estimates toward more than $1 billion in claims this summer. The Insurance Council of Australia data showed total claims have already climbed above $830 million after a $150 million rise in the past two weeks, and insurers expect the total to grow in the coming weeks.
The Insurance Council figures in the article show Queensland has the largest losses at $661.3 million, followed by NSW flood-related losses of $71.8 million. Tasmania’s bushfire claims are $87.1 million, and NSW bushfire claims total $10 million.
Yes—higher claims can affect insurer earnings. The article notes QBE is preparing to publish full-year results as industry claims rise. It also highlights that despite recent events Suncorp and IAG posted strong results: Suncorp’s net profit rose to $574 million and IAG’s profit rose to $461 million. Investors should watch upcoming earnings and claims updates to gauge impact.
Possibly. The article reports that IAG warned its home and car premiums could increase by 5% to 10% this year. Premium changes vary by insurer and depend on total claims, underwriting results and pricing decisions.
There can be a lag. As Insurance Council spokesman Campbell Fuller said in the article, it’s not unusual for claim figures to balloon more than a week after an event. Insurers typically release more complete figures in the days or weeks that follow severe weather.
The article states IAG’s six-month profit rose to $461 million and its profit margin jumped from 7.7% to 19.2%. For the six months to December 31 the group paid out $133 million on claims, and in the current calendar year it has spent about $120 million–$140 million on flood-related claims plus $35 million on bushfire-related claims.
Investors should monitor updated claims totals from the Insurance Council of Australia, upcoming insurer earnings releases (the article flags QBE’s full-year result), insurer guidance on premium changes, and any further severe-weather warnings. Those metrics will help show how natural disasters are affecting insurer profitability and pricing.
The Insurance Council of Australia aggregates industry loss figures and issues updates after major events. In the article, its data provided state-by-state loss estimates and an industry spokesman explained that reported claim totals can rise in the weeks following severe weather.
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