Bushfire insurance losses approach $1bn

Insurance losses from bushfires since September are approaching $1bn, with 11,272 claims received to date.

A home destroyed by bushfires. Picture: Sean Davey.

Insurance losses from Australia’s catastrophic bushfire season are approaching $1bn, with 11,272 bushfire-related claims received by insurers to date, the Insurance Council of Australia says.

The ongoing natural disaster has torn across the eastern seaboard and South Australia, devastating many communities.

As of January 10, insurance losses from bushfires stretching back to September – including two earlier events – stood at $995m.

A majority of those losses — $939m, spread across 10,550 claims – had been received since November, the ICA said on Friday.

Meanwhile, IAG, the country’s largest insurer, said it has received more than 5000 bushfire related claims since the beginning of September, and finalised more than 1000 of those claims to date.

The group has embedded teams on the ground in recovery centres across New South Wales and South Australia, including Batemans Bay, Ulladulla, Wagga Wagga, Bega and Adelaide Hills.

“We have had all hands on deck since the bushfires started in September – identifying and calling customers potentially impacted and then contacting customers as soon as claims are lodged,” IAG chief executive Mark Milliner said.

The figures came a day after the corporate regulator put the insurance industry on notice, warning it to deal with bushfire victims fairly and transparently, as it works with the insurers to monitor the ballooning claims.

The vast number of claims have already impacted insurers. Suncorp said on Thursday its natural hazards payouts were already $109m above budget for the first half of the financial year. It estimated claims costs for the financial year to date would total between $315m and $345m, with it receiving 2600 bushfire claims so far.

Suncorp chief executive Steve Johnson warned that recovery would take “a long time”.

Meanwhile, AMP chief economist Shane Oliver said that the total economic impact of the bushfires is “very difficult to measure”, given that a considerable amount would be indirect.

Mr Oliver said the pain from bushfires meant it was doubtful the federal government would achieve its budget surplus this year.

“Rightly, in the face of the pain caused by the bushfires, the government has relaxed the focus on achieving a budget surplus and it is now questionable as to whether it will be achieved this year and next,” he said.

The federal and NSW governments have announced $3bn of extra assistance this year to help communities recover from the devastating impact that has claimed 24 lives and over 1800 homes.