Australia’s major insurance providers including Suncorp and IAG are ramping up efforts to support customers affected by severe flooding currently unfolding across New South Wales and South East Queensland.
As a result, IAG has put on extra claims people who have worked over the weekend to ensure customers receive support as quickly as possible.
This includes finding emergency accommodation for customers and ensuring call wait times are not long for those wanting to lodge a claim.
Meanwhile, Suncorp’s customer support teams are set to be deployed to the most impacted regions when waters recede, and the company’s affected bank customers can access its emergency relief package.
More than 2,100 claims had been lodged with IAG as of 8pm on March 21, covering mainly property damage.
Based on the current level of claims and the ongoing impact of the event, the firm has stated that it’s too early to accurately determine the net cost of the flooding and storms.
As disclosed in IAG’s 1H21 financial results released in February this year, the company’s 2021 catastrophe reinsurance program has resulted in IAG having a Maximum Event Retention of $169 million (post-quota share) at 1 January 2021. IAG’s retention reduces to $135 million (post-quota share) for a second event.
IAG will provide a market update when it is in a position to more accurately determine the net cost relating to the heavy rain and flooding in NSW and south east QLD.
Meanwhile, Suncorp has a comprehensive reinsurance program in place for FY21, with the full limits remaining available on the group’s main catastrophe program and the dropdown aggregate covers.
The main catastrophe program has a maximum first event retention of $250 million, while the group’s reinsurance program is further strengthened by an Aggregate Excess of Loss (AXL) protection, which provides $400 million of cover in excess of a retention of $650 million with an event deductible of $5 million. As at 28 February 2021, $370 million of the AXL deductible had been eroded.
Suncorp’s FY21 natural hazard allowance is $950 million. As of 28 February 2021, Suncorp’s total natural hazard costs across Australia and New Zealand were $643 million, which is approximately $80 million favourable to the year-to-date allowance.
These estimates exclude any associated risk margin or claims handling expenses.
