The company said that, “Following the South Australian hail and Victorian wind event, and other events that impacted the second half of October, IAG has increased its expectation for FY22 net natural perils claim costs to $1,045 million, compared to the previous assumption of $765 million.” The result is that IAG expects to go over budget, suggesting more of its catastrophe claims could be flowing to its reinsurance partners as a result. IAG noted that is had raised its natural perils allowance significantly for this fiscal year 2022, but warned that “claims experience year to date has been seasonally unexpected and has exceeded the assumptions underpinning the increase.” IAG renewed its reinsurance program at the mid-year, with its per-occurrence retention set at that figure, so it looks like the gross loss above that attachment point is now set to flow to IAG’s reinsurance program partners.
IAG said that the storms and hail that struck South Australia and Victoria between 27th and 29th October and SE Queensland on 30th October have already driven approximately 14,000 claims, a number which is expected to rise further over coming days.Īs a result, the insurer said that “the net cost for this event is anticipated to be $169 million, the maximum retention for a first loss under IAG’s catastrophe program.” Australian primary insurance giant IAG has reported that recent severe storms and hail in Australia in October are set to drive a reinsurance recovery for the company, as its net loss hit the retention on its catastrophe reinsurance program.
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