NU Online News Service,Jan. 13, 2:50 p.m. EST

Flooding in the Australian state of Queenslandhas intensified over the last few days as rainfall in January hascompounded problems caused by rain and a tropical cyclone in lateDecember, and insurers are reporting increasing claim counts.

Estimated overall insured losses have not yetbeen issued. Catastrophe modeler AIR Worldwide said residentialflood coverage varies by insurer and location, but in many areas,additional premium is minimal while penetration can be significant.Deductibles can be as high as 50 percent, AIR said. For commercialrisks, AIR said flood coverage is included in many policies, thoughpreviously-flooded properties could be subject to higherpremiums.

For insurers, claims continue to roll in.Earlier this month, Queensland-based insurer SunCorp told the Australian Stock Exchange that itreceived 1,800 claims for the flooding that began late December. Ina Jan. 12 update, the insurer said it has received approximately2,500 claims from that system and expects the pre-tax cost of thatevent to be between $130 million and $150 million.

This does not include the second round offlooding since Jan. 8. For those claims, SunCorp said itsreinsurance program would limit its costs to between $70 millionand $90 million. SunCorp said it is “also likely to incuradditional reinsurance costs of around $120 million to reinstatemultiple covers for the remainder of the financial year.”

Insurance Australia Group (IAG) said earlierthis month it had received 600 claims from the late December andearly January flooding. IAG recently updated that total to 1,200claims and said its early estimate for net claim cost is between$10 million and $30 million.

For the more recent flooding, IAG said it hasreceived 2,400 claims, and has not yet developed an estimate onlosses.

According to Guy Carpenter’s Instrat unit,which compiled information from a variety of sources, AustralianPrime Minister Julia Gillard initially estimated the economicdamage from the floods at around AUD5 billion ($4.99 billion atcurrent exchange rate). But Guy Carpenter noted that as floodwatersspread east, the projection has risen, and a member of Australia’scentral bank warned that the disaster could cut 1 percent offprojected economic growth, equal to almost AUD13 billion ($12.98billion).

Guy Carpenter said it is still too early togauge how the floods will impact insurers and reinsurers, ascoverage for flood damage is not standard in many buildings andcontents insurance policies in Australia.

Guy Carpenter said heavy and persistent rain inQueensland in late December initially triggered the floods,“possibly as a result of the La Nina weather pattern.” Also inlate December, Tropical Cyclone Tasha made landfall in Queenslandas a weak tropical storm, bringing more rain to the area.

Heavy rain has continued in recent days,flooding more towns and cities.

According to catastrophe modeler RiskManagement Solutions (RMS), initial media reports are suggestingthat 11,900 homes and 4,500 commercial businesses have beenseriously damaged by floodwaters across the city of Brisbane, afterthe Brisbane River overflowed.

AIR said crop damage has also been extensivedue to the flooding. “According to some estimates, at least 20percent of Queensland's crops are underwater,” the modeler said.“The damage is expected to raise the global price of grain,particularly of wheat. Take-up rates for crop insurance are verylow in Australia.”