Insurance Australia Group (IAG) have reported that thanks to severe weather in the Victoria region of Australia between the 6th and 9th of March it has blown its budget for disaster costs for the second half of the year. They received over 24,000 claims for the event and exceeded their maximum event retention of $135m under their reinsurance cover. Suncorp Metway have also reported large losses but haven’t said whether it will affect their bottom line at the end of the year.
Read the report from IAG here.
Events like this negatively impact businesses bottom line. Usually on Artemis we’re discussing industries who don’t have sufficient cover but they’re normally outside of the insurance world. For insurers to be impacted in such a way it takes large events which don’t happen at all frequently so ensuring the cover in place is difficult. However, a blend of reinsurance and other ART or weather risk management techniques could at least have provided more of a buffer to IAG in this instance. A lesson to all that no-one is immune from the impact of unexpected severe weather.