THE hailstorm that lashed Sydney earlier this month will cost insurer Suncorp as much as $180 million and rival IAG, $105 million.

Suncorp, which offers policies under the GIO and Aami brands, today put a range of $150-$180 million on the bill from an estimated 23,000 claims.

Suncorp told the Australian stock exchange this morning that the majority of claims from the damage are for personal insurance, 65 per cent of them relating to motor vehicles.

Only a small proportion related to commercial insurance.

Suncorp chief executive John Mulcahy said the group had experienced a number of serious weather events during the first half of the 2008 financial year, which will impact profit in the first half.

"While these events will have a material impact on the group's first half profit, it is too early to update the insurance trading margin until all matters affecting this calculation are completed," he said.

"These include the half year end actuarial calculations and the mark to market impact of widening credit spreads on the Group's technical reserve investments.

"It should be noted that the mark to market impact of widening credit spreads is purely a timing issue, which will unwind in future periods. There is no suggestion of credit losses in this portfolio."

Meanwhile IAG - the old NRMA and one of the most commonly owned shares in NSW - today downgraded its annual margin guidance after the company received more than 21,000 claims.

IAG said its insurance margin would be between nine and 11 per cent in fiscal 2008, down from earlier guidance of 11 to 13 per cent.

The impact of the storms in the first week of December would cost about $105 million, net of reinsurance, IAG said.

Chief executive Michael Hawker said about 60 per cent of the claims received were for hail-damaged cars.

"We process claims as quickly as possible, however, with an event of this magnitude it takes time to finalise claims," he said.

"Our NRMA Insurance assessing centre in Blacktown would usually assess around 250 claims a week from Monday we have been assessing around 2,500 - a ten-fold increase.

"We've flown in assessors from Western Australia, South Australia, Queensland and regional NSW and we have also placed additional staff in our teleclaims area."

IAG said Sydney was experiencing the wettest year since 1998, resulting in increased claims frequency within the group's major portfolios.

"These storms are the third event in less than two years to each have a total personal lines claims cost over $100 million, following Cyclone Larry in March 2006 and the Queens Birthday weekend storms in June this year," IAG said.

"This is further evidence weather patterns are changing, which will have an impact on premiums."

The June storms wiped $200 million from IAG's fiscal 2007 profit, which fell 27 per cent.

IAG said should a third catastrophic event occur in Australia during the remainder of calendar 2007, its main catastrophe reinsurance arrangements would provide cover for any claims costs over $75 million.

The retention level for the additional commercial component, subject to a separate cover, remains at $25 million.

IAG shares had recovered from a modest early fall to be unchanged a short time ago at $4.12.