Ratings agency Moody’s is confident the market can cope with the devastating bushfires sweeping across Australia.
The relatively good news for the market comes as the total number of claims in the country has risen to A$939 million (US$644 million) according to the Insurance Council of Australia from 10,550 claims.
Frank Mirenzi, a Moody’s vice president and senior credit officer, commented: “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, which has kept its combined operating ratio consistently below 100% over the last 10 years.”
“Despite the manageable impact for insurers, the catastrophic fires highlight that the P&C insurance industry is at the forefront of environmental risk,” Mirenzi said. “The industry is exposed to the economic consequences of climate change, primarily through the unpredictable effect of climate change on the frequency and severity of weather-related catastrophic events, such as hurricanes, floods, convective storms, drought, and wildfires.”
The country is still reeling from hundreds of fires and the crisis is expected to continue long into the summer.

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