Premiums on hold for now - insurers
INSURANCE losses are expected to reach hundreds of millions of dollars in the coming weeks as floods in Queensland and NSW start to peak.
However, insurance companies insist that the latest losses are unlikely to mean premium increases.
One of the biggest insurers, Suncorp, said it was preparing to release updated claims figures on Tuesday after receiving higher than average claim volumes over the weekend.
Thousands of properties in Queensland have been inundated by heavy rain from the remnants of tropical cyclone Oswald, and thousands more premises are vulnerable to rising waters as heavy rain pushes south into NSW.
On Monday evening, more than 500 households in Lismore in northern NSW were preparing to evacuate as heavy rain threatened to cause severe flooding.
Suncorp said that, at this stage, it did not expect insurance premiums to rise a result of the severe weather.
"Obviously there have been premium increases in the last couple of years but those premiums are now reflecting the actual risk [from severe weather events], which has increased," a Suncorp spokeswoman said.
"But the first half of this financial year was relatively benign and we have allowance in place to cover [the kind of] events exactly as we're seeing right now."
An Commonwealth Bank insurance analyst, Ross Cameron, also said he did not expect insurance premiums to rise as a result of the floods.
"Insurance companies have [the] capacity to absorb some losses going into this year because the six months to December was a benign period for losses," he said. "It's an ongoing loss issue and it will play through, but at the moment it's not."
On Sunday, the Insurance Council of Australia declared a catastrophe in large parts of Queensland that have been affected by storms and floods.
On Monday, it said that claims arising from the wild weather had already topped $43 million, and the total value of claimed losses was expected to reach $50 million by midweek.
Insurance companies said they had received more claims than they had expected.
However, they also said that the cost of insurance claims would be unlikely to surpass that of the devastating floods in 2001.
"We're not expecting these events to be anything like the magnitude and scale of the events that we've seen in the past couple of years," Suncorp's spokeswoman, Michelle Barry, said.
Since early 2010, the ICA has declared six catastrophes in Queensland for flooding and cyclone damage, with total losses of almost $4 billion.
Meanwhile, the Bureau of Meteorology has issued a severe weather warning for destructive winds, heavy rain and abnormally high tides across a wide area from Wollongong to the north of the state.