Australia Flood Claims To Cost $2B & Growing

NU Online News Service, Feb. 14, 3:03 p.m. EST

The Insurance Council of Australia (ICA) said recent flooding in the state of Queensland has resulted in about 43,755 claims and an insured loss estimate of $2 billion.

The claims count increased as commercial and mining claims come to light, the ICA said.

At last count at the end of January, the ICA gave an insured loss estimate of $1.5 billion.

Insurers have already paid about $200 million to policyholders in Queensland.

Flooding in Victoria State generated nearly 6,000 claims so far and insured losses of about $67 million.

Independent reinsurance brokerage firm Holborn said losses for reinsurers in the first quarter will eclipse $4 billion. The brokerage estimates losses and expenses of between $1.5 billion and $3 billion due to Cyclone Yasi, which struck Queensland in early February.

Catastrophe modeler AIR Worldwide said insured losses from Yasi will be between $354 million and $1.5 billion. The prediction includes only insured physical damage to onshore property and business interruption.

Queensland-based RACQ Insurance said it has received more than 5,600 claims from flooding in December and January and 3,500 more claims from victims of Cyclone Yasi.

Reports in Australia indicate a growing dissatisfaction with claims processing. RACQ Insurance answered by saying it has started to pay claims for customers in the Toowoomba and Upper Lockyer Valley areas because hydrology investigations there are done. However, the insurer's chief executive, Bradley Heath, said there is “enormous pressure” in handling claims because there are not enough hydrologists and assessors.