Fire claims to go beyond $138m

The country's biggest insurers are counting the cost of the NSW bushfires, with losses worth an estimated $138 million and climbing.
By · 26 Oct 2013
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26 Oct 2013
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The country's biggest insurers are counting the cost of the NSW bushfires, with losses worth an estimated $138 million and climbing.

By Friday, victims of the bushfires had made 1011 insurance claims, according to the Insurance Council of Australia, implying a cost of $137,000 per claim.

The value of claims jumped $45million in the last past five days as residents returned to their homes in fire-ravaged areas to discover damaged or destroyed property.

"While claims lodgments have stabilised over the past couple of days, we expect these to begin climbing again as returning residents assess any property damage," Insurance Council chief executive Rob Whelan said on Friday.

Insurance Australia Group has received about 600 fire-related claims across its NRMA and CGU businesses.

A spokesman said it was too early to give an accurate indication of the cost of the claims.

But IAG boss Mike Wilkins said the group had already agreed on the settlement terms for more than 50 per cent of the "total loss" home claims it had received.

More than 200 homes have been destroyed by the fires.

But economists say they are unlikely to be as costly as past natural disasters.

"Unlike the floods in Queensland in late 2010 and early 2011, which saw more than 25 million tonnes of lost coal production and shaved around 0.75 percentage points off 2010-11 GDP growth, [these fires] will have an almost negligible impact on economic activity," ANZ economist Felicity Emmett said.

"[The] Queensland floods ... severely disrupted coal production in the Bowen Basin coalfields for some months and saw a significant drop in exports and a resulting drag on GDP, [but] the bushfires have caused little or no damage to the local infrastructure."

In the past 10 years, major bushfires have triggered insurance claims of $1.6 billion in Australia, according to figures compiled by Deutsche Bank.

The Victorian fires of 2009 inflicted the largest insurance cost, exceeding $1 billion, with more than 9000 claims.

Deutsche Bank analyst Kieran Chidgey said large insurers IAG and Suncorp had "significant headroom" to cover this and other big insurance events, with dedicated 2014 financial year budgets of $640 million and $565 million respectively.

Insurers have sent disaster specialist teams to the Blue Mountain to help bushfire victims with questions on insurance claims.

Fire authorities welcomed a cool weather change late in the week.
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