(Reuters) - Insurance Australia Group Ltd (IAG.AX) on Friday pegged net claim costs from natural disasters at A$400 million ($279.36 million) for the first half of fiscal 2020 in the wake of a deadly season of bushfires in the country.
Australia’s largest insurer said it had received more than 2,800 bushfire-related claims since the start of September 2019, adding over 1,500 of these were lodged since the start of December 2019 and related to residential properties.
Bushfires so far this season have scorched more than 4 million hectares (10 million acres) of bushland and destroyed over 1,000 homes, including 381 homes destroyed on the south coast just this week.
Evacuations are ongoing, with the Australian navy currently ushering away some of the thousands of people stranded on the east coast as a searing weather front was set to whip up more blazes across the states of Victoria and New South Wales (NSW).
Out of the A$400 million of the claim costs it expects for the six months ended Dec. 31, 2019, overall bushfire events are likely to account for over A$160 million, IAG said.
In comparison, the insurer had logged higher net natural peril claim costs of A$414 million in the first half of 2019, a sharp uptick from the year earlier due to higher claims from a hailstorm in Sydney.
The company said the perils estimates for the period included three ongoing bushfire events, the costs of which have been limited by the company’s reinsurance program for the year.
IAG separately said it had raised its catastrophe reinsurance program for the 2020 calendar year to A$10 billion from A$9 billion last year.
The company said it experienced stable reinsurance rates during the renewal process, with overall expense for the renewal in line with the fiscal 2020’s reported margin guidance.
Reporting by Rashmi Ashok in Bengaluru; Editing by Shounak Dasgupta and Subhranshu Sahu