Wesfarmers Announces a Drop in First-half Earnings From its Insurance Division

/, Insurance News, Insurers/Wesfarmers Announces a Drop in First-half Earnings From its Insurance Division

Wesfarmers expects a 74 per cent drop in first-half earnings from its insurance division because of a high number of natural disasters.

Wesfarmers’ insurance division includes the Lumley Insurance, OAMPS and WFI brands.

Estimated net claims from bushfires in Western Australia, the Christchurch earthquake on December 23 and the Christmas day storms in Melbourne are $28 million over the company’s allowances, Wesfarmers said on Wednesday.

Lumley general insurance in New Zealand would also incur a $26 million expense for increasing its reserves for the February Christchurch earthquake, it said.

As a result, earnings before interest and tax (EBIT) from the insurance division for the six months to December 31 are expected to be about $23 million.

Wesfarmers’ insurance division delivered EBIT of $65 million in the same period in the previous year.

The company was reducing its exposure to higher-hazard areas and industries as it focused on disciplined underwriting, Wesfarmers Insurance managing director Rob Scott said in a statement.

Premium rate increases were being achieved in property- and farm-related insurance classes and these were expected to offset the rising cost of re-insurance, he said.

Other major insurers have downgraded their financial forecasts in recent weeks as a result of ongoing natural disasters.

QBE Insurance expects its net profit for calendar 2011 to fall by 40 to 50 per cent, and Suncorp expects claims costs to be well over its budgeted $240 million.

Wesfarmers also owns Coles Insurance and operates coal mining and chemical operations.

Source AAP

Arrange an Insurance Quote Here

Quotesonline Free Insurance Quotes

Please note Quotesonline Insurance News is an information service provided by third parties Insure 247 Australia doesn’t warrants the accuracy of any information contained there in, readers should make their own enquiry’s before relying on information in the stories Terms of Service

Free Car Insurance Quotes

 

The Quotesonline Team

Helping Australians with Insurance Quotes since 2002. Quotesonline is operated buy Insure 247, we are based on the Gold Coast in Australia Since 2002 we have assisted over 1 million Australians with their insurance requests

Call Now ButtonCall For Quotes
%d bloggers like this: