Insurance and reinsurance industry losses from the flooding in the Southeast Queensland and New South Wales regions of Australia have now reached $2.2 billion, as Sunshine Coast-based insurer Youi tells the Australian Financial Review that it will make a recovery under its aggregate reinsurance protection.
Insurers across both states have now received almost 148,000 claims related to the flooding which commenced in February. Based on previous flood events, the ICA says this is currently a $2.2 billion industry loss.
This represents a 2% rise in claims from yesterday and has seen insurers in the country call on their reinsurance coverage.
Analysts have warned that reinsurers are likely to assume much of the losses from the floods as aggregate treaties come into play.
Australian insurer Youi, which has compulsory flood cover, has reportedly received nearly 5,000 claims from the event.
In a recent interview with the Australian Financial Review, the company’s Chief Executive Officer (CEO), Hugo Schreuder, said that the firm’s flood impact would be mitigated by its aggregate reinsurance, which limits its exposure to $2 million for each event after Youi had already triggered this layer of protection prior to the flooding.
Schreuder also explained that there’s discussions around how many events were in the latest deluge.
Yesterday, Suncorp reported that for reinsurance purposes, it’s treating the flooding as four separate events and that it expects to trigger its aggregate catastrophe reinsurance, its drop-down protection, and the main catastrophe excess-of-loss tower.
The reason the floods are being counted as four loss events will be to maximise the responsiveness of a company’s reinsurance tower, given the hours clauses that are in place for different types of treaty and protection.
