NU Online News Service, Feb. 1, 1:37 p.m. EST
As waterlogged Queensland, Australia, braces for another round of flooding, the Insurance Council of Australia (ICA) raised its estimate of industry losses to $1.5 billion from previous flooding to the same area.
ICA said its members have received about 38,460 claims. Nearly half are for residential properties and about 10 percent are for commercial properties. The ICA also documented claims for resident contents, commercial and personal automobiles, and business interruption. More than half of the claims are from the city of Brisbane.
The high amount of claims is despite the fact that flood coverage in Australia varies depending on the insurer. The additional premium for flood coverage is minimal in many areas and penetration can be high, but in flood-prone areas deductibles are as high as 50 percent. The coverage is included in many commercial policies.
Reinsurer PartnerRe Ltd. said Australia flooding in December is expected to cost the company between $25 million and $35 million, to be recorded in 2010 fourth-quarter results. Chubb Corp. recently said the first round of flooding in late 2010 did not affect the insurer, but it expects 2011 flood-related losses of between $75 million and $100 million to dampen first-quarter earnings—an estimate made before this latest flooding.
Queensland-based insurer SunCorp said earlier this month that its reinsurance program would limit the cost of claims relating to storm and flood damage in Brisbane and areas of southeast Queensland since January to between $70 million and $90 million. The company will probably spend $120 million to reinstate multiple covers for the rest of the fiscal year.
From the first weather system late last year SunCorp said it has received 2,500 claims and is expecting losses of between $130 million and $150 million.
Catastrophe modelers Risk Management Solutions (RMS) and AIR Worldwide warned of more extreme flooding to Queensland due to Tropical Storm Yasi, a Category 4 storm with sustained winds of nearly 140 mph. Storm surge is also a major concern, AIR added.
The Australian Bureau of Meteorology said the cyclone seriously threatens northern Queensland communities.
RMS said Yasi is projected to make landfall as a storm comparable to Hurricane Katrina in 2005 and larger than Cyclone Larry that hit Innisfail, Australia, in 2006 and caused $547.4 million in insured losses. Most of the forecast models have Yasi passing between Innisfail and Mackay, and the towns of Cairns and Townsville are expected to experience destructive winds from the cyclone.