Queensland bears brunt as flood waters near peak
THE damage bill for insurers from the flooding in the wake of ex-tropical cyclone Oswald continues to rise, with almost 12,000 claims lodged as of late Tuesday.
Queensland remains the centre of the disaster, with customers making 9800 claims involving some $116 million, according to the Insurance Council of Australia.
With towns such as Bundaberg still battling record flood waters, insurance claims were certain to rise further, said Campbell Fuller, the council's head of corporate affairs.
Significantly for insurers, though, the toll from NSW looks likely to be much smaller, with the first 2000 claims involving about $10 million in insured losses, he said.
"Most of the claims in NSW are directly related to storm damage," Mr Fuller said. More of the claims north of the border involve inundation.
NSW towns such as Grafton and Lismore, while under threat earlier this week from rising floodwater, were relatively better prepared for the deluge with flood levees and other mitigation works, he said.
"The importance of [flood] mitigation is alive and well," Mr Fuller said.
The council and several of the big insurers such as IAG and Suncorp have been pressing governments to invest more to limit the impact of natural disasters. Such measures include levees and buy-backs for residents located in the most flood-prone regions.
The Queensland government had been taking some "very positive steps" in mitigation efforts, Mr Fuller said.
Still, those steps would not make much difference to the costs for the latest event.
"We expect insurance losses to develop materially from here, far exceeding the $80 million cost from the January 2013 bushfires in Tasmania and Victoria," said Kieren Chidgey, an equity researcher at Deutsche Bank.
"However, with flood levels mostly well below those seen in 2011 and the cities of Brisbane and Ipswich spared from major flooding, losses are unlikely to be anywhere on the scale of the $2.4 billion from the January 2011 floods."
Suncorp, the owner of AAMI and GIO, is set to be the worst affected of the major insurance companies, already fielding about 4000 claims for flood and storm damage.
Insurance Australia Group, which operates the NRMA Insurance and CGU businesses, said it had received about 2000 claims.
QBE has fielded 700 claims, and said it expected the final number to be well below those taken after the 2011 Queensland floods.
Westpac and its St George unit had received about 500 claims, mostly in Queensland, with losses in the order of "a few million dollars" so far, a spokesman for the bank said.
The insurers said they were financially prepared for the latest natural disaster, given a relatively quiet 2012, meaning there is unlikely to be an immediate impact on premiums.
Shares in two of the three companies fell heavily when trade resumed on Tuesday after the long weekend.
Suncorp shares lost 21¢, or 1.9 per cent, to $10.70 and QBE dropped 31¢, or 2.7 per cent, to $11.28. IAG was down for most of the day but recovered to add 1¢ to $4.93.
Westpac shares, meanwhile, rose 67¢, or 2.4 per cent, to $28.22.