- Insurance Australia Group (IAG) has finalised its catastrophe reinsurance program for 2020
- Gross reinsurance protection has been upgraded to $10 billion compared to 2019's $9 billion
- The company has been working hard to help those affected by ongoing bushfires, with 2800 bushfire-related claims since the beginning of September
- IAG says helping those affected by the bushfires is currently the company's top priority
- Investors took well to today news as IAG shares trade one per cent higher for $7.66 each
As bushfires continue to rage across the country, insurers like Insurance Group Australia (IAG) are the first point of contact for those affected as the rubble settles.
IAG has had its work cut it for it in the past few months with 2800 bushfire-related claims since the beginning of September. The country's biggest insurer released an update this morning on its natural peril claims potential cost for the first half of the 2020 financial year.
With 1500 bushfire-related claims lodged since the beginning of September alone, IAG said it anticipates a figure of around $400 million for natural peril claim costs for the half-year. The company said, however, it is still too early to provide a precise outcome, so this $400 million figure is based on initial IAG estimates.
IAG's Australia Division CEO Mark Milliner said helping those affected by the fires as soon as possible is a priority for the company.
"Our claims teams are identifying and calling those customers potentially impacted when appropriate, while our dedicated major event claims teams are contacting customers as soon as claims are lodged," Mark said.
He encouraged any customers affected to make contact at the earliest opportunity possible.
"Our assessors and claims teams are on standby to support customers when it is safe to enter impacted areas, and our partner builders have the capacity to enter those regions when practicable," he said.
On top of the natural peril claims update, IAG told shareholders it has finalised its catastrophe reinsurance program for the 2020 calendar year.
Gross reinsurance protection has been upgraded to $10 billion compared to 2019's $9 billion.
IAG Chief Financial Officer Nick Hawkins said the reinsurance program is an "integral" part of the company's capital platform.
"While the structure of the 2020 program is similar to prior years, we continue to expand our catastrophe reinsurance cover in a cost-effective manner, while providing additional protection above our modelled exposure," Nick said.
According to today's release, IAG experience relatively stable reinsurance rates during the renewal process — meaning overall expense outcomes fell in line with IAG's guidance.
Investors have taken well to today's update as the country bands together to bring some order to the chaos of the ongoing bushfires.
In early afternoon trade, IAG's shares are up one per cent and trading for $7.66 each. The company has a $17.70 billion market cap.