The Insurance Australia Group Ltd (ASX: IAG) share price struggled through March.
Its suffering came as major floods wreaked havoc in parts of Australia and news of a second business interruption test case hit the market.
At the end of last month, the IAG share price was $4.38. That's 4.78% lower than where it ended February.
Over the same period, the S&P/ASX 200 Index (ASX: XJO) gained 6.39%, leaving the IAG underperforming by 11.17% for the month.
So, what weighed on the insurance giant's stock in March? Let's take a look.
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Why did the IAG share price struggle through March?
March started out rough for many Australians, with major floods hitting parts of southeast Queensland and northern New South Wales.
Understandably, this likely led some market watchers to wonder if the cost to repair damages would dint the insurer's bottom line.
IAG was quick to mitigate concerns, releasing a statement on 1 March saying it was too early to understand the true cost of the disaster. However, it estimated it could be as high as $95 million.
The insurer followed up on that statement the following week.
Then, it announced that as of 6am on 9 March, it had received 24,000 claims related to the weather event. It was estimated to lead to a $74 million damage bill – less than what was previously predicted.
Though, due to the storms and flooding, IAG increased its financial year 2022 net natural perils claims cost from $1.045 billion to approximately $1.1 billion.
Interestingly, despite falling in intraday trade on 1 March and 9 March, the IAG share price ended both sessions flat with its previous close.
An update on the second business interruption test case also weighed on the insurer's stock last month.
The company noted that, while it wasn't adjusting its $1,222 million net provision for business interruption claims, some indications made it believe a release from the provision will occur and will likely be recognised over time.
The IAG share price slumped 1.3% the day the update was released.
What else happened last month?
The company also made headlines last month with reports claiming it's being taken to Federal Court to face around $300 million of claims.
The legal action was reportedly spurred by the company's now-sold 50% stake in Bond and Credit Co.
Bond and Credit Co is an insurer. It's said to have sold credit policies to cover entities related to the now-defunct Greensill Capital.
Previously, IAG stated it had no exposure to the credit policies. Commenting on the matter last month, an IAG spokesperson said the company's stance hadn't changed and it was anticipating litigation.
It's unlikely the reports budged the IAG share price. Though, they might have shaken some market watchers' confidence in the company.
IAG share price snapshot
The IAG share price underperformed the ASX last month. However, it's been ultimately trading in line with the index in 2022.
As of the end of March, the IAG share price was 1.79% lower than its previous close. At that same point, the ASX 200 had slipped 1.19% year to date.
Right now, shares in IAG are trading for 8.8% less than they were last year. Meanwhile, the ASX 200 has gained 9.9% over the last 12 months.
