Insurance Australia Group (IAG) has cut its 2008 financial year margin forecast to 9-11% from 11-13% as a result of more than 21,000 claims lodged with the insurer since the hail storm that hit NSW on 7 and 9 December.
The claims amount to more than $105 million worth of reinsurance, and as a result the margin guidance for 2007/08 was cut.
IAG chief executive officer Michael Hawker said as at 19 December, the group has received more than 21,000 claims in total, around 60% of which were hail-damaged cars.
"Our first priority is to ensure we are supporting our customers. Within 24 hours of the hailstorm hitting we had established a temporary hail assessment centre and we opened a second centre on Monday," Hawker said.
These storms are the third event in less than two years to each have a total personal lines claims cost over $100 million, following Cyclone Larry in March 2006 and the Queen's Birthday weekend storm in June this year.
IAG said this is further evidence weather patterns are changing which will have an impact on premiums.
Sydney-based IAG provides a range of personal insurance and commercial insurance products, primary motor vehicle and home insurance, as well superannuation, savings and banking products and workers' compensation.
The market is valuing the company at approximately $7.5 billion.
IAG stock has slowly lost ground since January 2007 when it hit a high of $6.63 – and at current prices represents a paper loss of over 30% in 12 months.
Other insurers are also experiencing a rise in claim numbers due to the storm. Brisbane-based Suncorp-Metway (SUN) said it received over 17,000 claims relating to the storm.
Shares in SUN fell 25 cents or 1.44% to $17.09 at 11.06AM AEST.
IAG fell 6 cents to $4.14 as at 12.48pm AEST.
