RMI expects more claims from raging Australian bushfires
Rand Merchant Investment (RMI) Holdings expects further insurance claims as a result of the catastrophic bushfires in Australia that have raged across the country since November last year.
RMI said on Friday that its estimate of losses since the fires began in November 2019 up until January 8 was between A$25m and A$40m, equating to R250m to R400m.
RMI’s Australian subsidiary Youi offers insurance for homes and motor vehicles.
“We’re doing our best to assist at this point, but people have been so deeply affected they are just trying to get their lives in order, and many have not even had access to their properties. For these reasons, there have been delays in claims being made and so the figure we have published is our best estimate at this point,” RMI CEO Herman Bosman said.
Bosman said the number is still a moving target. “The fires are still raging and it’s hard to say when they will be contained and whether rain may bring some respite,” he said.
The Australian federal government declared a state of emergency in New South Wales and Victoria on January 4 and has begun setting aside billions of dollars to help rebuild communities.
While Youi has a number of reinsurance mechanisms in place to offset these losses, the quantum will be determined at a later date and is dependent on certain thresholds for gross claims being reached.
Under its natural perils treaty, Youi has protection for natural disasters in excess of A$80m.
Youi is active in Australia and New Zealand and was built from the ground up by RMI. Last year, Youi contributed R698m or 16% to RMI’s profit after tax of R4.37bn for the period ending June 2019.
RMI will publish interim results on March 11.