Image by Edar from Pixabay
Insurance giant Suncorp has warned that its natural hazard costs across Australia and New Zealand for the first four months of the current financial year are estimated at $348-408 million following last weekend’s destructive hailstorm in south-east Queensland and parts of NSW.
Damage from the storm accounts for $180-220 million in pre-tax net costs, with the next largest impact of $30-$50 million, resulting from other eastern states storms on 20 October.
As of Friday (6 November), the insurer had received around 6,400 claims related to the hailstorm, comprising about 3,300 motor claims, 2,800 home claims and 300 commercial claims. These numbers are, however, expected to continue rise.
Suncorp’s natural hazard allowance for this financial year is $950-million, divided between the first and second halves of the year.
Other event impacts in the total outlined by the company in a statement include $12-million from New Zealand North Island flooding in July and $5 million from the Lake Ohau bushfire last month, also in New Zealand.
The Insurance Council of Australia reported on Thursday that insurers have received more than 22,500 claims from the south-east Queensland hailstorms, with losses estimated at $260 million.
The event was declared a catastrophe by the Insurance Council last Sunday. By then – the day after the storm struck – insurers had already received more than 5,000 claims with insured losses estimated at $60-million.
In late October, actuarial firm Finity published its annual state-of-the-industry Optima report, which found that natural perils events, COVID-19, and plummeting investment returns saw insurance industry return on equity (ROE) fall to 4%, down from 13% in the previous 12 months.
“You’ve got to go back a long way to find an ROE of 4%,” the lead author of the report, Andy Cohen, told the website InsuranceNEWS.com.au . “You’ve got to go back a long way to find something that bad.
“We really have fallen off a cliff a little bit – perhaps not surprisingly given bushfires [and other catastrophes], combined with COVID in the fourth quarter.”