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Sector
Financials
Size
Large Cap
Market Cap £5.23bn
Enterprise Value £7.56bn
Revenue £11.96bn
Position in Universe 37th / 1841

BUZZ-Aussie insurers can fight bushfires but remain at the mercy of climate change risk - Moody's

Thu 9th January, 2020 5:56am
** Fire-related claims will dent profits for Australian
insurers such as Suncorp Group  SUN.AX , Insurance Australia
Group  IAG.AX  and QBE Insurance Group  QBE.AX  but the
industry's strong fundamentals will mitigate impact, Moody's
says in a note
    ** Massive bushfires raging across Australia since September
have razed more than 25.5 mln acres of land, killing 26 people
and killing or injuring an estimated one billion animals
 urn:newsml:reuters.com:*:nL4N29E0CL
    ** Moody's expects Suncorp and IAG to field the largest sum
of gross claims due to their significant market share in home
and motor insurance
    ** "Although we expect claims to continue to rise, dampening
the sector's profits, they are likely to be manageable as the
industry has a long history of strong underwriting discipline,"
says Frank Mirenzi, a Moody's vice president and senior credit
officer
    ** However, he adds that the industry is at the forefront of
environmental risk mainly through "the unpredictable effect of
climate change on the frequency and severity of weather-related
catastrophic events"
    ** Suncorp says it has received more than 2,600
bushfire-related claims since September, worth as much as A$345
mln ($237.08 mln)  urn:newsml:reuters.com:*:nL4N29E0ZW
    ** Shares of Suncorp closed 1.3% higher on Thursday
    ** "There are no red flags from Suncorp ... they have done
their reinsurance in a responsible fashion," says James McGlew,
executive director of corporate stockbroking at Argonaut
    ** Reinsurance refers to insurers spreading risk by taking
insurance policies from other underwriters to limit their own
total loss in case of disaster    
    ** However, if the bushfires carry on for another 6 to 8
weeks, insurers will start to feel the pressure, McGlew added



($1 = 1.4552 Australian dollars)

 (Reporting by Devika Syamnath in Bengaluru)
 ((Devika.Syamnath@thomsonreuters.com; +91 80 6749 1130;))
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