Storms 'won't increase premiums'

INSURANCE losses are expected to rise into the hundreds of millions of dollars in coming weeks as floods start to peak across Queensland and New South Wales.

But insurance companies insist the latest losses are unlikely to trigger a fresh round of premium increases.

One of Australia's 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 Queensland properties have been inundated by heavy rain from ex-tropical cyclone Oswald, and thousands more are at risk of rising waters as heavy rain pushes south into NSW.

On Monday evening, more than 500 households in the northern NSW town of Lismore were preparing to evacuate as heavy rain threatened to bring severe flooding to the region.

But Suncorp said it was not expecting insurance premiums to increase as a result of the severe weather at this stage.

"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," Suncorp spokeswoman Michelle Barry said.

"But the first half of this financial year was relatively benign and we have allowance in place to cover events exactly as we're seeing right now."

Commonwealth Bank insurance analyst Ross Cameron said he also did not expect insurance premiums to rise as a result of the floods.

"Insurance companies have 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."

The Insurance Council of Australia on Sunday declared a catastrophe for large parts of Queensland affected by storms and inundation caused by ex-tropical cyclone Oswald.

On Monday it said claims from the wild weather had already topped $43 million, and total claimed losses were expected to hit $50 million by mid-week.

Insurance companies say they have received more claims than expected. However, they also say the cost of insurance would unlikely surpass the cost of the devastating 2011 floods.

"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," Ms Barry said.

Since early 2010, the ICA has declared six catastrophes in Queensland for flooding and cyclone damage, with losses of almost $4 billion.

The Bureau of Meteorology has posted a severe weather warning for destructive winds, heavy rain and abnormally high tides over a wide area stretching from Wollongong and the Illawarra region, south of Sydney, to the state's north.