As insurance claims related to the ongoing flooding in Southeast Queensland and the New South Wales coast continue to rise, a number of insurers have already warned that the event is expected to trigger their reinsurance protection.
The latest data from the Insurance Council of Australia (ICA) reveals that insurers have received almost 31,000 claims, which marks a 107% increase on yesterday’s count.
As we wrote previously, the severe weather and flooding resulted in the ICA declaring an insurance catastrophe for Southeast Queensland, as well as areas of New South Wales and the Mid-North Coast region.
The ICA states that it’s still too early to provide an estimate of claims costs given the event is ongoing and claims are still being reported.
A number of insurance carriers that operate in the country have now reported on the event, and it’s clear that reinsurance protection is going to come into play.
Insurance Australia Group (IAG) has reported that as of 5am March 1st, it had received approximately 6,700 claims across its brands, with NRMA Insurance presenting almost 73% of all claims. The firm adds that the number of claims is expected to increase in the coming days.
Commenting on its reinsurance coverage, IAG says that after allowing for quota share arrangements, the combination of all catastrophe covers results in the firm having a maximum event retention of $95 million.
“The tragic loss of life and devastation from this disaster is heartbreaking,” said Nick Hawkins, IAG Managing Director and CEO. “Ensuring the safety of residents is our priority and we urge everyone to follow the directions of the emergency services who, once again, are doing an incredible job rescuing people from floodwaters.”
“Our dedicated Major Events team is supporting customers with emergency help such as temporary accommodation and ensuring properties are safe and secure. Our teams are assessing properties wherever possible and will move into the flood impacted areas as soon as waters recede,” he added.
Insurer Suncorp has also provided an update on the event, saying this morning that it has received 10,000 claims, according to local media reports.
Reports explain how the insurer has comprehensive reinsurance protection in place including the main catastrophe program, dropdown aggregate layers and an aggregate XoL treaty all with full limits available. Additionally, Suncorp has in place quota share arrangements for its Queensland home insurance portfolio.
In light of this, it’s been reported that the maximum retained cost for Suncorp from the flooding is expected to be $75 million, with the full-year outlook for natural hazard costs remaining at around $1.075 billion.
Global insurer and reinsurer Allianz has also commented on the storms, reporting to the Australian Financial Review that it was looking at 4,800 claims, but that it was too early to tell if that would trigger any of its reinsurance coverage for the flood losses.
At the same time, RACQ, a customer-owned conglomerate with insurance, banking and motor assistance arms, told the Australian Financial Review that it has received over 3,600 claims from the event.
“The weather event will see RACQ’s reinsurance triggered,” said a RACQ spokeswoman. “This is the first loss against RACQ’s catastrophe cover for this financial year, and as such will have a net cost to RACQ of $50 million.” She also explained that the company’s catastrophe cover program had lower deductibles for subsequent disasters.
