We won't get a true reckoning of the cost of Cyclone Debbie to economic output and coal exports until the June quarter accounts, to be released in three months' time. Credit:Glenn Hunt The belief that insurance rates could rise - a move that could enhance profit next year - explains why the share price of IAG was not decimated on Wednesday when the profit downgrade was released to the market. Additonally, investors had been bracing themselves for bad news following Debbie and were not especially disarmed by the company's estimate that the cyclone would cost $140 million - net of reinsurance. IAG has already received 4300 claims, mainly for property damage."This is a highly unusual and complex event with the devastating effects still being felt across North and South East Queensland, Northern New South Wales and New Zealand.', the company said in its statement on Wednesday. The event means IAG has lowered its 2017 financial year reported insurance margin guidance range, from 12.5 per cent to 14 per cent to now just between 10.5 per cent and 12.5 per cent.

Only a month ago, the insurer gave the market an update on its financial position following the Sydney hailstorms in February. At that time, it expected the net claim cost of the hailstorm to be around $160 million, with its maximum net exposure to that event around $200 million. The other insurer with a particularly large exposure to Cyclone Debbie is Suncorp which is estimated to have about 35 per cent of Queensland's home and motor insurance market. A recent report from broker UBS noted that, should insured losses approximate the 2011 Cyclone Yasi, Suncorp could hit its $250 million maximum event retention - which is the largest loss it could be exposed to. Given the magnitude of these losses, it's easy to expect premiums to rise - making life even more difficult for those residents hit by natural disasters to adequately insure their property. Beware the competition sleeper that's yet to wake up

While there was plenty of debate at the AFR's Banking and Wealth Summit on Wednesday around the best way to manage the risks to banks and borrowers of an overheated property market, the chairman of the Australian Competition and Consumer Commission, Rod Sims, pointed out that despite all the talk of financial technology, nothing significant has happened. In other words: the would-be fintech disruptors of the cosy banking oligopoly have yet to even touch the sides in a competition sense. In many ways, the banks have played defence very cleverly when it comes to dead batted digital entrants. The big four have spent billions of dollars over the past five or more years on IT to make their systems better and the customer experience more seamless. Fortification of their positions allows them to hold on to their market share, sustain large cash flows and further invest in their own innovations. Sims went some small way last week to upset the dominance of the banks in the payment system by refusing to allow the big four (minus ANZ) to negotiate as a block with tech giant Apple around digital wallets and ApplePay.

The banks want to use their own digital wallets (tap-and-go) to be available for consumers using iphones. Apple says the banks will have to use ApplePay's digital wallet. While Sims makes a fair point in bemoaning the fact that fintech hasn't yet enhanced the level of competition in Australian banking, it's just a matter of time. Loading The move to force banks to provide open access to customer data is likely to push the process along. The banks don't like it and have resisted it. But they realise that it is coming, having seen it happen in other markets like the UK and Europe. It's the real competition sleeper.