Slowly the size of the bills for Victoria’s storms and Queensland’s floods, are taking shape.
So far over 22,000 claims have been received for the two disasters, but it is early days and insurance companies expect that to rise.
Some analysts say 40,000 claims from Victoria might be made.
Insurance Australia Group, which is in a joint venture with RACV in Victoria, plus the business-focused CGU brand, says it has so far received in excess of 10,000 claims from customers.
Suncorp has received more than 12,500 for its Promina, GIO, APIA and other brands.
It has received a further 1300 or so claims from parts of southwest Queensland where floods continue to cause damage.
The insurance bill for Queensland will be felt greatest by Suncorp, because it’s the biggest property and casualty insurer in the state.
Through its Promina brands, it’s also a big insurer in Victoria, especially the Melbourne area (Promina was based in Melbourne before the takeover by Suncorp three years ago).
So Suncorp get’s the worst of both disasters in its claims book.
IAG said in a statement that claims lodged to date from Melbourne relate to vehicles damaged by hail, flooding or falling branches. There are also claims related to home contents, roof and skylight damage, and some commercial claims.
IAG CEO Mike Wilkins said it remained too early to provide an estimate of the Group’s total claim costs related to this event, however IAG will update the market as soon as it is in a position to do so.
With effect from January 1, 2010, IAG’s reinsurance retention for a single event in Australia is a maximum of $135 million.
Suncorp’s limit is $200 million before its reinsurance is triggered.
In a speech last month, John Trowbridge, a director of financial regulator, APRA, provided a list of major disasters in Australia in the past decade.
"There had been few major weather events during the first half of the decade.
"The Canberra bushfires in 2003 were perhaps the worst in that period, at some $350 million, but several larger events occurred in 2006, 07, 08 and 09.
"They included Cyclone Larry in March 2006 ($540 million), the Hunter Valley storms in June 2007 ($1,450 million), storms in Sydney, Brisbane and Mackay in 2007 and 2008 (around $400 million each) and the Victorian bushfires just over one year ago in February 2009 ($1,070 million)."
The cost of the Sydney hail storm of 1999 is put at $1.9 billion (which Saturday’s storm in Melbourne is being compared to) and is the largest in reported dollars.
Around 130,000 people were affected in the Sydney hailstorm.
But in unadjusted dollars, the biggies in Australian history are the Newcastle earthquake of 1989 and Darwin’s Cyclone Tracy in 1974.
The shares of the listed insurers took the news of the rising number of claims calmly.
IAG shares rose 4c to $4.03, Suncorp was up 9 to $8.63 and QBE, which has yet to update the market on its claims (if any), rose 44c to $21.10.
