Insurance Australia Group will take a $1.15 billion hit to earnings before tax in its half-year results in February, as it prepares for a potential flood of pandemic-related business interruption claims.

The hit, which was foreshadowed in November, will be recorded as a "corporate expense" in the insurer's half-year accounts, and held in reserve. If IAG avoids a flood of legitimate business interruption claims, as it is aiming to do, much of the money could be released from reserves at a later time.