Giant balls of ice pelted Sydney’s motorists and rooftops, and now insurers are taking cover as a barrage of claims rain down, with IAG expecting the bill from the storm to hit $169 million.
The insurance giant saw its share price drop by more than 4.5 cent after announcing it had received 6500 claims so far from the Thursday evening storm, with that number expected to rise significantly in the coming days.
Insurance rivals QBE and Queensland-based Suncorp were also subdued during early trade, with the latter’s stock also dropping by more than four per cent.
Suncorp said while it was too early to accurately estimate the number of claims it expects to receive, or the final costs, it had received 7,800 claims by 1230 AEDT on Friday.
Tennis ball-sized hailstones smashed into homes and cars in Sydney’s west on Thursday evening, while golf ball-sized stones battered the city’s inner suburbs less than an hour later in what the Insurance Council of Australia has declared a ‘catastrophe’.
Wollongong, the Hunter, and the Central Coast were also hit with NSW SES receiving calls to about 1800 jobs through the night.
IAG said claims were predominantly motor and property damage, with the bill potentially climbing to $169 million.
‘Our priority is to help customers affected by the hailstorm as soon as possible,’ IAG Australia Division chief executive Mark Milliner said.
‘Extra employees have been allocated to the claims and repair management teams and our online claim lodgement facility is assisting the rapid assessment of claims.’
IAG shares fell 4.5 per cent to $6.64 when the company resumed from a pause in trade at the open.
Shares were 3.6 per cent lower at $6.705 at 1340 AEDT, while Suncorp was down 4.26 per cent at $12.37, and QBE was down 1.54 per cent at $9.60.
Suncorp said its comprehensive reinsurance program for FY19, would limit the impact of the storm to a maximum of $250 million.
IAG said the cost of any subsequent event up to December 31 will be capped at $17 million pre-tax post-quota share, with the maximum event retention to reset on January 1 and will be similar to the $169 million applicable this year.
IAG estimates year-to-date net natural peril claim costs were about $410-430 million pre-tax, including a southern low that affected parts of NSW, Victoria and Queensland in mid-December.
Suncorp estimates total natural hazard costs across Australia and New Zealand for the six month period to December 31 to be $350 million to $360 million.