Insurance Australia Group Ltd. lowered its insurance margin range for fiscal 2017 following additional claim costs for Tropical Cyclone Debbie.
The company on April 5 estimated it would incur a net natural peril claims cost of A$140 million from tropical cyclone Debbie and has increased its expectation for net natural peril claim costs in fiscal 2017 to A$850 million.
IAG has received about 4,300 claims as of April 4 for property damage in relation to the cyclone. Tropical cyclone Debbie brought heavy rainfall and flooding to Australia's Queensland and northern New South Wales regions March 28.
Following the event, the insurer raised its expected net natural peril claim costs for the fiscal year to A$850 million from the previous expectation of A$680 million. This comprises with about A$650 million for the eight months ended Feb. 28, A$50 million from events in March and A$140 million for Tropical Cyclone Debbie.
The A$170 million increase in the company's net natural peril claim cost equates to about 200 basis points at the reported insurance margin level. As such, the company lowered its fiscal 2017 reported insurance margin guidance range to 10.5% to 12.5% from 12.5% to 14.5%.
As of April 4, US$1 was equivalent to A$1.32.