The Insurance Australia Group Ltd (ASX: IAG) share price is edging lower today, striking pain again for shareholders.
In the past week, the insurance giant’s shares travelled around 7% lower.
At the time of writing, the company shares are down a further 0.12% to $4.255.
What’s the latest with IAG?
Investors are sending the IAG share price lower following the company’s update regarding the recent severe weather impacting Australia’s east coast.
According to the announcement, IAG advised it has received more than 24,000 claims across south-east Queensland and New South Wales as of 9 March. This includes around 3,500 claims from the widespread flooding which has occurred throughout Sydney over the last three days.
IAG stated that while the wet weather continues to hit the eastern seaboard, the number of claims is expected to rise.
Management noted that it has extensive reinsurance protection in place.
The company said current estimates to the net claims cost from the storm and flooding event is approximately $74 million. This is lower than the forecast $95 million the company disclosed in early March. IAG said this was due to development on previous claims that further eroded its FY22 aggregate and reduced net claims costs.
As it stands, IAG has utilised roughly $95 million of the $236 million of aggregate cover following the weather-related event.
From February 2022, the company increased its expectation for FY22 net natural perils claims costs to approximately $1.1 billion. Previously that number stood at an estimate of $1,045 million.
Nonetheless, IAG reaffirmed its reported margin guidance range of 10% to 12% for FY22. However, given the increase in estimated net natural perils claims costs, the lower half of the guidance range is more likely.
IAG managing director and CEO Nick Hawkins commented:
We have all hands on deck for our NRMA Insurance, CGU and WFI customers with extra people on the phones and on the ground in devastated areas in Queensland and NSW. Our assessors and repairers have started assessments and emergency make safe repairs in impacted areas and we are securing temporary accommodation for customers who can’t return to their homes.
IAG share price summary
Over the last 12 months, the IAG share price has lost almost 8%, with year-to-date flat. The company’s shares have fallen 50% since July 2019, with heavy losses attributed to the COVID-19 pandemic.
Based on today’s price, IAG presides a market capitalisation of roughly $10.5 billion, with approximately 2.47 billion shares on issue.