Insights

Here’s why ASX 200 insurers are underperforming the market this Wednesday

The 5.9 magnitude quake may cost the industry billions of dollars.
The post Here’s why ASX 200 insurers are underperforming the market this Wednesday appeared first on The Motley Fool Australia. –

Investors of ASX 200 insurance companies may not be too pleased today.

The sector is underperforming the market as The Australian reports the industry is bracing for a wave of claims in the wake of this morning’s Melbourne earthquake.

At the time of writing, shares in Insurance Australia Group Ltd (ASX: IAG) are $4.92 – down 1.99%, QBE Insurance Group Ltd (ASX: QBE) shares are $11.31 – up 0.31%, and Suncorp Group Ltd (ASX: SUN) is trading for $12.31 – down 1.01%. The S&P/ASX 200 Index (ASX: XJO) is 0.84% higher.

Let’s take a closer look at today’s news.

Earthquake strikes Victoria

Just after 9 this morning, a 5.9 magnitude earthquake struck 10km from the Victorian town of Mansfield. Heavy shaking was felt in Melbourne with tremors felt in Tasmania, the ACT, and even Sydney.

A video circulating social media shows the damage experienced by at least one building on Melbourne’s popular Chapel Street.

Just got sent this video from a friend in Melbourne pic.twitter.com/SWOpRdirkJ

— Tom Steinfort (@tomsteinfort) September 21, 2021

While the extent of the damage is unclear following the earthquake and subsequent aftershocks at the moment, investors in ASX 200 insurance companies aren’t taking any chances.

For FY22, IAG increased its natural perils (i.e., disasters) allowance from $658 million to $765 million. QBE was already above its allocated amount when it released its half-year results and Suncorp also increased its allowance for the current financial year to $980 million.

Considering this is the most powerful earthquake in Victoria since European settlement, at least according to one seismologist, this may not have been the forecasts of these ASX 200 insurers.

According to The Australian, insurers lost $3.2 billion the last time Australia had such a powerful earthquake – the 1989 tremor that hit Newcastle.

ASX 200 insurers share price snapshot

Over the past 12 months, the IAG share price has increased 10.1%, the QBE share price lifted 29.6%, and the Suncorp share price jumped 46.3%.

QBE and Suncorp have overperformed the S&P/ASX 200 Index (ASX: XJO) over the same period while IAG has underperformed the index by about 16 percentage points.

The market capitalisations of these companies range from $12-$17 billion.

The post Here’s why ASX 200 insurers are underperforming the market this Wednesday appeared first on The Motley Fool Australia.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of August 16th 2021

More reading

Why the QBE (ASX:QBE) share price is on a rollercoaster today
IAG (ASX:IAG) share price slumps 2% amid earthquake payout concerns
2 excellent ASX dividend shares named as buys

5 things to watch on the ASX 200 on Wednesday

IAG (ASX:IAG) share price gains after Chief Risk Officer resignation

Motley Fool contributor Marc Sidarous has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Insurance Australia Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!