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IAG, Suncorp say too early to adjust BI provisions

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IAG and Suncorp say it is too early to make changes to their business interruption claim provisions following a Federal Court test case judgment on Friday that went largely in favour of insurers.

The Federal Court has already set aside time next month to hear any appeals, with an aim for the matter to be finalised before the end of the year or early next year.

“IAG is reviewing the judgment to determine whether to appeal any aspect of the judgment,” it said in a statement this morning.

The insurer says it will consider potential impacts on a business interruption provision announced in November and provide any updates “at the appropriate time”.

The insurer last November outlined a pre-tax provision of $1.2 billion, or $865 million after tax.

Suncorp said this morning its provision for potential business interruption claims relating to COVID-19 of $211 million remains unchanged pending any appeal.

The group will complete a full review of the provision as part of its normal process to prepare for the interim results for the current financial year, it says.

The Insurance Council of Australia says insurers, including those not directly involved in the test case, are committed to applying the principles determined by the outcome.