Melbourne storms cost insurers $550 million

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30 January 2012

Insurers have received claims worth more than $550 million following Melbourne’s Christmas Day hailstorms, according to the Insurance Council of Australia (ICA).

Several storm fronts, some containing large hailstones, hit the northern suburbs of Melbourne late on Christmas Day. ICA declared the storms a catastrophe on December 29.

CEO Rob Whelan says insurers have so far received 77,174 claims, with 56% related to vehicle damage and the rest involving residential and commercial property damage and business interruption.

Suncorp says its preliminary assessment is about 28,000 claims worth up to $250 million. It says its natural hazards allowance for the half-year to December could blow out to $420 million from an original estimate of about $240 million.

IAG MD Mike Wilkins says some policyholders have been slow to file claims because of the holiday period.

He says about 24,000 claims had been made on IAG companies’ policies, which will result in net claims cost of up to $200 million, pushing out its natural perils allowance to $420 million from $266 million.

Claims made through RACV Insurance, one of the biggest personal lines insurers in Victoria, are included in IAG’s figures. RACV owns 30% of the Insurance Manufacturers of Australia joint venture with IAG.

Mr Wilkins declined to provide guidance on how the storms would affect IAG’s earnings for the 2011/12 year. The group reports its half-yearly results on February 23.