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The devastating bushfire events will also take a toll on the Australian insurer Youi, which is majority-owned by OUTsurance.
Rand Merchant Investments, which owns 89% of OUTsurance, released a statement on Friday morning, warning that Youi expects gross losses related to the bushfires, up to 8 January, of between A$25 million and A$40 million (R392 million).
“This wide range is reflective of the high level of uncertainty pertaining to these estimates,” said Youi’s CEO, Hugo Schreuder. This is due to the fact that access to some the affected areas is restricted preventing accurate assessments for many claims.
The bushfires, fuelled by the third year of an unprecedented drought in Australia, have destroyed an estimated 25 million acres and more than 2,000 houses. More than 1 billion animals are also feared dead.
Some of the losses should be covered by Youi’s reinsurance cover for catastrophe events. However, the particulars of the reinsurance cover – especially large deductibles of A$9.5 million per week of the fire – could limit the payouts.
Including the estimated retained loss from the bushfires, the retained loss from a large hailstorm on the Sunshine Coast in November 2019 and other natural perils claims, Youi is estimated to have incurred between A$45 million and A$60 million in net natural perils losses to date.
RMI expects to publish interim results on 11 March 2020 when further detail regarding the bushfires will be provided. OUTsurance launched Youi Australia in 2008.
RMI also said that the sale of Youi New Zealand to Tower Insurance has been completed.
Some A$12.1 million (R120 million) was earned from the deal, and the transaction will also release surplus capital of some A$47 million which is available to Youi.
