IAG is suffering badly from the Auckland floods
Nick Sundich, February 3, 2023
It has been nearly a week since the Auckland floods and there has been little indication of if any companies have been impacted, and (if so) to what extent. That has changed this morning, with one of Australia’s biggest insurers having counted the cost of the damage.
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IAG expects a big impact from the Auckland floods
Insurer IAG (ASX:IAG) will likely be impacted by the Auckland floods more than any other company. It told shareholders this morning over 15,000 claims have been lodged. Furthermore, a preliminary assessment of them have indicated that gross costs will exceed $350m.
IAG said that it has a strong reinsurance program in place for any further catastrophe events during CY23. The Maximum Event Retention was $236m, but this will be reduced to $192m.
Some good news too
Despite the cost of the Auckland floods, it wasn’t all bad news for shareholders. The company also gave guidance for its 1HY23, which will be delivered on Monday 13 February. IAG expects an NPAT of $468m, more than double the $173m recorded in 1HY22.
Business as usual for almost everyone else
Seemingly, few other companies have been impacted by the Auckland floods – at least materially. One other New Zealand company to update shareholders today was Briscoe (ASX:BGP), an operator of homeware stores and Rebel Sports stores on the other side of the Tasman.
Briscoe did not mention anything about the floods, instead providing unaudited results for its full year (given it uses a February to January financial year). It expects NZ$785.9m in sales (up 5.6%) and an NPAT of at least NZ$88m, roughly in line with last year. Full results, including its dividend, will be unveiled in mid-March.
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