Commercial property insurance claims have driven the reported insured loss for Cyclone Marcia, which struck Queensland, Australia in February, up to $403,6m from almost 30,000 claims, according to the Insurance Council of Australia.
Estimates of insurance industry losses for Cyclone Marcia started off at very low levels, but as always after a catastrophe event it takes time for losses to be reported by property and business owners and the expectation was that the tally would rise.
Now the ICA reports that the expected influx of claims has begun and commercial insurance losses to businesses in the region have increased the reserved value of insurance losses to $403.6m from 29,565 claims.
ICA CEO Rob Whelan said that insurance companies are dealing with hundreds of business claims lodged via insurance brokers; “These business claims are for a wide range of cyclone-related losses, from property and vehicle damage to business interruption. Many of these cases are quite complex.”
Whelan said most claims received to date were for domestic policies in Yeppoon and Rockhampton and neighbouring towns; “A large proportion of the properties severely damaged or destroyed by Cyclone Marcia were older buildings with poor resilience to the impact of cyclones and storms.”
Rebuilding of properties is expected to be in line with standards which should increase the regions resilience to storms over time.
A number of Australian primary insurers had already said that the cyclone losses could pass the point where they call on their reinsurance.
At the moment it looks like any impact to the reinsurance industry will be very small. So unless an ILS fund manager that participated in an insurers programme on a collateralized basis, or another third-party capital structure such as a sidecar, has a particularly high exposure to Australian cyclones and reinsurance programmes in the region, losses will likely be zero to minimal at worst.