The Insurance Council of Australia (ICA) has recorded 15,571 insurance claims from the flooding in Townsville, Queensland so far, with current industry losses estimated to be around AUD $606 million (US $429 million).
Rob Whelan, Chief Executive Officer (CEO) of the ICA, today briefed the Queensland Deputy Premier on the re/insurance industry’s mobilisation of resources following the declaration of the flooding as a catastrophe last week.
He explained that re/insurers were prioritising support to 457 residential properties that have been identified as unliveable, and have already provided $17.5 million in support, emergency accommodation and repairs.
The city of Townsville and the surrounding area in northeastern Queensland has experienced torrential rain and flash flooding since the beginning of February, with an estimated 20,000 homes at risk.
The flooding was compounded further after flood gates at the Ross River dam were fully opened last week to drain dangerously high water levels, releasing up to 1,900 cubic metres of water a second and sweeping away cars and more than 300,000 livestock.
The industry has deployed several hundred disaster recovery experts, assessors and claims staff into Townsville since the airport reopened, the ICA said.
“The deployment of resources and expertise by insurers has been the fastest response to a Catastrophe on record, despite Townsville being inaccessible in the aftermath of the floods,” Whelan noted.
While the Council is confident that affected policyholders can be assisted in a timely manner, there are concerns that many homes and businesses in the area may be uninsured.
“We believe most households chose to buy policies that cover them for flood, though some may have opted out,” said Whelan. “However, though many Townsville businesses affected by the Catastrophe did buy flood cover, the ICA is concerned that a significant number chose not to purchase flood cover.”
Many Townsville residents have criticised town planners and insurers following the flooding, claiming that properties in the area had been rated as flood-free, or discovering that too late that policies only covered storm damage rather than flood.
“Commercial flood cover has been available for Townsville businesses since 2007 and is sold by most large insurers,” Whelan told local authorities. “It is also widely available to all householders. All policies are risk-rated, the same as in any other part of Australia.”
“Where flood cover was not purchased it will typically be tested by the insurer through an independent hydrology process,” he explained. “This will determine if the inundation that caused the damage is to be classified as flood water or as storm water.”
Also in attendance at the Townsville briefing were heads of Australian insurers Suncorp, QBE, RACQ, Allianz and IAG, all of whom are expecting to incur significant losses from the flooding.
Suncorp reported yesterday that Townsville claims had triggered its Natural Hazards Aggregate Protection (NHAP) reinsurance program, meaning its losses would be capped at $97 million.
RACQ also expects its reinsurance protection to absorb a significant proportion of its losses, which are currently estimated in the range of $30 million to $50 million.