ASX 200 insurance shares are taking a battering this week amid devastating floods in Queensland and New South Wales.
Three S&P/ASX 200 Index (ASX: XJO) shares facing thousands of insurance claims are QBE Insurance Group Ltd (ASX: QBE), Insurance Australia Group Ltd (ASX: IAG), and Suncorp Group Ltd (ASX: SUN).
Let's take a look at how the floods could impact these three shares.
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Insurance claims sky rocket
A flooding crisis is sadly devastating two eastern states in Australia. Half a million people are currently under evacuation orders in New South Wales, Nine News reports.
S&P Global Ratings predicts the damage bill of the floods could be between $1 and $2 billion, Insurance News reported.
More than 48,200 flooding insurance claims are in the works, Insurance Council of Australia figures show. Most of these are in Queensland, however, NSW claims are expected to skyrocket in the next few days.
QBE has boosted its team helping flood victims lodge claims. The company said:
We're working hard to support our customers affected by the severe weather and flooding across Australia's East Coast, which is causing devastating damage to homes, vehicles and businesses.
Insurance Australia is being inundated with thousands of claims. The insurer expects the total number to rise as the event unfolds. In a release to the market on Tuesday, the company reiterated it has a maximum event retention of $95 million. This is the maximum loss the insurer can be exposed to in an extreme event.
Suncorp predicts the maximum retained cost from the floods will be about $75 million. In a statement to the market on Monday, the company said:
The full year outlook for natural disaster hazard costs remains around $1.075 billion.
The QBE share price has descended 7.3% since market close last Friday, including a 0.82% fall today. The IAG share price edged 0.68% higher today but has tumbled 7.5% this week. Meanwhile, Suncorp shares are down 4.7% since Friday after losing 1.12% today.
Share price recap
The QBE share price has surged 18% in the past year, while Suncorp has climbed 4%. Meanwhile, IAG has fallen 9% in the last 52 weeks. For perspective, the benchmark ASX 200 has returned almost 5% in the past year.
In the year to date, QBE and Suncorp shares have fallen around 4%, while the IAG share price has climbed 4%.
