The cost of recent floods and bushfires have reached up to A$175 million (NZ$218m) for Insurance Australia Group, but analysts still expect profits in the industry to grow this financial year.
IAG, which operates NRMA Insurance and CGU, has to date received more than 13,700 claims related to floods caused by ex-tropical cyclone Oswald in Queensland and northern NSW in January.
Those claims are expected to cost it between A$120 million (NZ$150m) and A$140 million (NZ$175m), IAG said today.
An additional 600 claims have been lodged for damage caused by bushfires in NSW, Victoria and Queensland over January, at an estimated cost of about A$35 million (NZ$43m).
With assessors still in the field, IAG’s costs could still rise, but its reinsurance programme limits the impact of the first natural disaster of 2013 to A$150 million (NZ$187m).
Suncorp said last week its costs from floods would not exceed A$220 million (NZ$275m), leaving at least A$103 million (NZ$129m) in provisions for the remainder of the 2012/13 financial year.
Analysts do not expect the recent floods and bushfires to have a major financial impact on insurers, with profits set to bounce back after the impact of the 2011 Queensland floods and New Zealand’s earthquakes.
Commonwealth Bank analysts Ross Curran and Naveen Patney have forecast a net profit of A$616 million (NZ$770m) for IAG in the 2012/13 financial year, almost triple what it made in the previous year.
Suncorp’s full year insurance profit is forecast to reach A$819 million (NZ$1b), up 66 per cent on the previous year.
QBE Insurance reports over the calendar year, and will release its 2012 financial results on February 26.
The company has more of a global focus than its peers, and CBA’s analysts expect a net profit of US$843 million (NZ$1b), up 20 per cent on the previous year.