Flooding this month is expected to push IAG’s estimated net natural perils claim costs for this financial year to $660-700 million, topping its allowance for the period.

The company had been tracking to fall within the $658 million allowance, with the recent flooding following a relatively benign period for the eight months to the end of February.

Based on exposure, claims lodged to date and experience with previous similar events, IAG estimates the net cost of the flooding at about $135 million, after quota share arrangements.

The net cost will be capped at $169 million, the maximum event retention for a first event under the catastrophe reinsurance program.

IAG says natural peril claims costs were about $375 million for the first eight months, while the company also assumes an estimated $150-190 million for further peril events in the March-June period.

Suncorp said last week it will update the market on the expected claims costs once numbers stabilise and it is in a position to more accurately estimate the ultimate number of claims.

The company has a natural hazard allowance for the financial year of $950 million. Costs across Australia and New Zealand were $643 million as of February 28, which was about $80 million below the year-to-date allowance.