Financial impact of Tropical Cyclone Debbie and lower FY17 reported insurance margin guidance: Insurance Australia Group Ltd (ASX: IAG) stock fell over 0.34% on April 05, 2017 after the company released an update giving out the financial impact of Tropical Cyclone Debbie. The group also revised FY17 reported insurance margin guidance. IAG has estimated that it would incur a net natural peril claims cost of approximately $140 million from Tropical Cyclone Debbie, which is consistent with the maximum event exposure indicated in the perils update provided on March 06, 2017. IAG’s businesses have received approximately 4,300 claims as at April 04, 2017 for mainly the property damage in relation to the Tropical Cyclone Debbie. Moreover, IAG has upgraded its expectation for FY17 net natural peril claim costs to $850 million, as compared to the previously held assumption of $680 million. This equates to approximately 200 basis points at the reported insurance margin level. Therefore, IAG has lowered its FY17 reported insurance margin guidance range, from 12.5-14.5% to 10.5-12.5%.
Buy-back of outstanding Convertible Preference Shares: IAG had earlier advised about buying back the outstanding balance of Convertible Preference Shares (CPS), amounting to about $153 million, and has recently issued a notice to buy back its CPS on May 01, 2017.The aggregate buy-back price is said to be $156,191,285 (this includes $153,015,000 on account of the issue price of CPS and $3,176,285 on account of the additional amount determined by the Directors), and the last date for trading of CPS is April 07, 2017.
IAG stock had risen 8.94% in the last six months (as of April 04, 2017).
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1H 17 Financial Performance (Source: Company Reports)
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