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Heavy rains and floods in New South Wales and Queensland have severely hit the life in the region. The floods which are said to be worst in half a century have forced thousands to evacuate and damaged number of properties. Since the damage is on such a large scale, insurers such as Suncorp Group (ASX:SUN) and Insurance Australia Group (ASX:IAG) are expecting a surge in insurance claims. However, it would be too early to predict the total costs arising from the natural calamity.
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Suncorp Group Ltd (ASX:SUN)
SunCorp Group on Thursday, 25 March 2021 announced that it had received over 5,400 claims across New South Wales, South East Queensland and Victoria. Almost 80 per cent claims were from New South Wales. The insurer said that Suncorp says 85 per cent of claims were related to the damage to the property damage. The insurer expected the number of such claims to see a rise in the coming days.
The company also said that it would be able the update the market on the expected cost only when the number stabilise.
Meanwhile, Suncorp's customer service teams were on the ground in NSW helping
those affected by the devastating floods. Suncorp staff are out in Port Macquarie, where they have received the most claims to date The teams was providing face-to-face support by arranging emergency repairs, organising temporary accommodation and providing cash payment to the needy.
At 2:58 PM (AEDT), the stock was trading at A$9.94, up 0.035 points, or 0.35 per cent, against the previous closing.
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IAG Ltd (ASX:IAG)
On Friday, 26 March 2021, Insurance Australia Group Ltd announced that it had received 8,000 insurance claims by 4 PM on 25 March 2021. The claims were mostly for property damages. The insurer expected the claims to rise with time.
The company said that it expected the FY21 net natural perils claim costs of nearly A$660 million to A$700 million, higher than A$658 million perils allowance for the period. The insurer expected MER to remain unchanged at A$169 million as of 26 March 2021. IAG has an aggregate cover that provides $350 million of protection in excess of $400 million. The ongoing floods may remove A$150 million from IAG’s A$400 million deductible.
Shares of the insurer declined nearly 22 per cent in the last 12 months. 21.7 per cent in the last 12 months. However, they gained 1.6 per cent this year. At 2:58 PM (AEDT), the stock was trading at A$4.79, down 0.010 points, or 0.21 per cent, against the previous closing.