We wrote last week that the insured loss estimates for the recent Queensland, Australia floods, combined with the flooding in December in Australia were now being touted as around $6 billion. Now, Business Insurance reports that a Barclays Capital analyst has suggested they could top $6 billion (particularly likely now the flooding has moved south) and that reinsurers in Bermuda were at risk of having earnings per share estimates cut.
The flooding was initially thought to have little impact on the reinsurance industry and the impact would be felt with domestic Australian general insurers. That’s proving to be wishful thinking as the claims keep coming and the extent of the property insurance and business interruption claims are exposed. Actual reconstruction costs for rebuilding the areas damaged by the floods are said to be closer to $20 billion so the impact on the reinsurance industry could have been a lot worse.
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