IAG shares fall in Australia after massive flooding in New Zealand

SYDNEY — Shares in Insurance Australia Group Ltd.
fell early Monday after the general insurer said that claims in New Zealand will likely rise after severe storms and flooding around Auckland, and that it may review its natural peril costs for fiscal 2023.

The stock was down 4.5% to 4.88 Australian dollars (US$3.45), after hitting a low of A$4.78 earlier. The insurer is currently the third-worst performer on Australia’s S&P/ASX 200.

IAG said Monday that it has so far gotten more than 5,000 claims across its AMI, State and NZI brands.

“The number of claims is expected to rise further over the coming days, with the event still unfolding and as customers identify damage to their property,” the insurer said in a regulatory filing.

IAG said it is too early to determine the financial impact of the weather event in Auckland, adding that as the impact becomes clearer, it may review its estimate for FY 2023 natural peril costs.

Australian general insurers, including IAG rival Suncorp Group Ltd.
have been managing the fallout from three consecutive La Niña’s, which has prompted a spike in premium pricing. While the likely end of La Niña may provide a reprieve, insurers have also been pressured by higher reinsurance costs.

IAG on Monday said that it had “extensive reinsurance arrangements in place for natural peril catastrophe events.”

IAG shares were up 11.5% over 2022.

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