Interpac Business and Migration Solutions Melbourne Australia

（January 9,2012）

MAJOR insurer IAG is expected to come under pressure this week as equity investors wait to see the likely impact of Melbourne's Christmas Day hailstorm.

IAG has a similar share of the Melbourne home insurance market to Suncorp, which last week revealed that the storm was a big factor in an expected $120 million-$180m hit to its bottom line for the six months to December 31.

Suncorp, whose main brand in Victoria is AAMI, revealed late last week that the hailstorm looked likely to cost it between $200m-$250m, although some of that is covered by a $240m natural hazard reinsurance allowance it had for the period.

The damage bill from the storm, which ravaged parts of Melbourne's northern suburbs such as Eltham, Taylors Lakes, Greensborough and Keilor with hailstones the size of golfballs, had initially been estimated at about $100m.

IAG is still understood to be going though hailstorm claims coming in as Melburnians return from pre-Christmas holidays to find claimable damage to houses, cars and other property.

"You'd always expect to see a period of time elapse for people to lodge claims, but the Christmas Day timing of this event is particularly unusual," said IAG spokesman Andrew Tubb yesterday. "We've said we will update the market as soon as possible."

Both insurers' shares were hit on Friday after the Suncorp announcement, with the Queensland based insurer dropping 3.3 per cent to $8.43.

IAG shares had a comparatively smaller drop of 2.3 per cent but they are expected to face greater pressure than Suncorp this week, until a hailstorm damage estimate becomes public.

QBE appears relatively unscathed by that event because of the wider global spread of its operations. Its shares eased 3c to $13.12 on Friday.

The effect of natural disasters on Australia's insurers was highlighted last week when IAG revealed that it had had to secure an extra $600m worth of reinsurance cover for the 2012 year at a cost of about $100m. In 2011 it paid $620m for $4.1 billion worth of cover but the calendar 2012 coverage has been ratcheted up to $4.7bn. General insurers reduce risk by taking out cover with reinsurers such as Munich Re and Swiss Re, both of which have stated that natural disaster claims against them have been increasing at a rising rate for a decade.
（Source：theaustralian）