Insurers go global for claims help

Almost 9000 bushfire-related claims have been lodged with insurance companies since September.

Insurance claims for property losses and damage incurred in the east coast bushfires have hit $700m Picture: AFP

The catastrophic bushfires across the east coast have prompted general insurers to mobilise claims ­assessors from around the country and New Zealand, while also keeping open the option to call in help from other countries.

A spokesman for the Insurance Council of Australia on Wednesday said insurers were bringing in assessors from across Australia and New Zealand to help ensure “rapid assessments” of property damage.

“If demand requires it, insurers may supplement these specialists with assessors from other countries such as Canada,” he added.

On Tuesday, Insurance Australia Group chief executive Peter Harmer told The Australian the company had 56 full-time claims assessors in Australia, with more expected to arrive from New Zealand late this week to assist with a ballooning number of claims.

IAG has received more than 3700 bushfire claims since September, with Mr Harmer expecting a large jump in claims over coming weeks and months.

“It would not surprise us if it goes close to doubling,” he said.

Suncorp has a client manager claim model in place to support customers, and has deployed support teams to local communities, where it is deemed safe to assist with claim lodgements.

Across the industry almost 9000 bushfire-related claims from NSW, Victoria, Queensland and South Australia have been lodged with insurers since September, representing swelling ­insurance losses of $700m.

Despite the expected surge in insurance claims, some analysts are also pointing out positive factors at play for the sector.

Credit Suisse analysts note investment markets had performed better than their expectations in the December quarter, providing some cushion to general insurers for claims stemming from natural disasters.

“Investment markets performed slightly ahead of our normalised assumptions in the December quarter. International equity gains, in Australian dollars, were slightly above our assumptions which were partially offset by lower domestic market gains,” the research says.

“The benign September quarter didn’t flow through to the ­December quarter, which was ­affected by a number of hail events and the ongoing bushfires across Australia.”

Credit Suisse said it had pencilled in natural peril claims at Suncorp of $510m for the six months to December 31, above a $410m allowance.

“This is offset by a lower second-half 2020 assumption of $310m, benefiting from reinsurance recoveries, which results in an in-line FY20,” they add.

The analysts upgraded their expectations for Suncorp’s full-year profit by 2 per cent and reduced their estimate for IAG by 0.1 per cent.

IAG last week outlined net natural peril claims costs of $400m, post its quota share arrangement, for the six months ended December 31, with bushfire events to contribute more than $160m.

Fitch Ratings this week said while reinsurance protection and increased natural hazard allowances would help general insurers contain earnings volatility from the bushfires, IAG and Suncorp would “bear the brunt” of claims.

Fitch cited the combined market share of more than 50 per cent of IAG and Suncorp in Australian personal insurance lines.