There are both devastating and amazing stories resulting from the once-a-century floods across NSW at the moment. For investors, the leading ASX insurance share prices are all on watch, as more than 3,000 insurance claims have been made across the country.
That number is expected to rise dramatically over the coming days.
In wake of the disaster, the ASX's major insurance companies have reacted differently. Note that German insurer Allianz, which has 8% of the Australian general insurance market, is not listed on the domestic exchange.
Leading ASX insurance share prices
Overall, the financial services sector has been performing very strongly this year, which makes it an especially timely occasion to look at the performance of Australia's three largest insurance companies: Insurance Australia Group Ltd (ASX: IAG), Suncorp Group Ltd (ASX: SUN), and QBE Insurance Group Ltd (ASX: QBE).
All three insurance companies have had positive 2021 share price performances year-to-date as the ASX has entered a bullish streak. The QBE share price is the overall winner in 2021 so far, up more than 12% at the time of writing.
IAG
With 29% of the overall insurance market, IAG has fielded more than 2,100 claims as of Sunday. The company has a maximum event retention of $169 million, which reduces to $135 million for a second event under its catastrophe reinsurance program. IAG says it's still too early to predict the net cost of the disaster to its bottom line.
The IAG share price has risen steadily so far throughout the natural disaster, with the market leader adding 2.15% this week to counteract its 10% decline over the past 12 months.
At the time of writing, IAG shares are in the green, up by 0.84%.
What IAG CEO Nick Hawkins said:
We know this is a very stressful time for those affected by the severe weather we are experiencing. Our immediate focus is on the safety of all the communities impacted by this heavy rain and flooding and we urge everyone to follow the directions of the emergency authorities.
We now have additional resources in place to help our customers get back on their feet and we encourage customers to contact us to lodge their claim as soon as possible so we can organise immediate assistance.
As soon as it's safe to access the impacted areas, we'll have our teams on the ground to begin the assessment and repair process, but our customers can access immediate help, including emergency accommodation, as soon as they contact us.
Suncorp
With 27% of the overall market, industry runner-up Suncorp has been the major loser so far this week, down 7.21%. This flies in the face of Suncorp's yearly share price performance, which is a healthy 25% gain. However, that still hasn't been enough to beat the sector, with the Suncorp share price down 39% against the broader competition.
As of 10am Monday 22 March, Suncorp had only fielded 1,300 claims, 800 less than IAG had three days earlier. Suncorp's first-event catastrophe reinsurance program allows for a much greater overall payout, with $250 million in holdings. The insurance group also have an aggregate excess of loss (AXL) protection, which provides $400 million of cover in excess of a retention of $650 million, with an event deductible of $5 million.
However, before the floods, $370 million of the AXL deductible had already been eroded. The group's natural hazard allowance in FY21 is $950 million.
What Suncorp Group CEO Steve Johnston said:
Our thoughts are with communities contending with this weather and the emergency services personnel and volunteers who are putting themselves in harm's way.
Our Customer Support Teams will be deployed to the most impacted regions when waters recede, and our affected bank customers can access our emergency relief package. Our customers can be assured that we're committed to their recovery and we will be with them every step of the way.
QBE
The QBE share price has lost 3.64% this week despite positive news for investors yesterday, with QBE revealing it had no exposure to insolvent UK financial services company Greensill. QBE is, so far, the only of the big three not to make a public ASX announcement throughout the disaster. It's also up 1% today.
With 10% of the overall insurance market, QBE has been on a rollercoaster on the ASX over the past 12 months. The QBE share price has gone from a low of $7.32 per share on 23 March 2020, rocketing up to $10.98 by 14 August that year, and now to $9.59 today.
The Motley Fool reported in February that QBE's strong recent performance has led to multiple brokers increasing their ratings on the insurance company.
