Australian insurer Suncorp has announced an expected losses of between $230 million and $250 million from the recent heavy rainfall and flooding across New South Wales, South East Queensland and Victoria.
Concurrently, the Insurance Council of Australia has raised its estimate from the $438 announced earlier this week to $497 million, consisting of 33,152 claims.
Suncorp describes its reinsurance program as comprehensive and says full limits remain available on all main catastrophe program and dropdown aggregate reinsurance covers.
In addition to eroding the deductibles on the dropdown aggregate covers, this event is expected to further erode the deductible on Suncorp’s Aggregate Excess of Loss (AXL) protection.
The AXL provides $400 million of cover in excess of a retention of $650 million with an event deductible of $5 million. As at 28 February 2021, $370 million of the AXL deductible had been eroded.
The insurer has received just over 7,600 claims across all three states, a figure expected to rise further as customers gain access to affected regions and the extent of damage becomes clear.
Around three-quarters of claims are from NSW, with around 20% from Queensland and the balance from Victoria and the ACT.
Suncorp notes that the severity of claims varies significantly between regions.
Suncorp Group CEO Steve Johnston said, “Suncorp continues to work with our customers, particularly in the hardest-hit areas of the Mid-North Coast of NSW and Western Sydney.
“Floods too frequently devastate communities across Australia, which is why as a country we must address this risk. Unfortunately, many homes in Richmond, Windsor, Penrith, Port Macquarie and Taree are in medium to very high flood risk areas.
“As a country, we need to address how we can protect homes in flood-prone regions through government investment in mitigation infrastructure. We must also improve planning decisions to ensure we are not building new homes in high-risk areas.”
