Insurance claims from the Townsville flooding in Queensland, Australia are now estimated to have reached A$606 million, increasing the likelihood of reinsurance programs being triggered for insurers operating in the region.
The Insurance Council of Australia (ICA) said that claims are being handled swiftly, but the ultimate industry loss has risen significantly in recent days.
The ICA has reported an industry impact from 13,560 claims causing losses estimated at A$165 million (US $120m( on February 10th.
But this morning the estimate rose dramatically, with over 15,500 claims expected to drive A$606 million (US $435m) of losses to insurance and ultimately some reinsurance providers.
CEO Rob Whelan explained, “The deployment of resources and expertise by insurers has been the fastest response to a Catastrophe on record, despite Townsville being inaccessible in the aftermath of the floods. There is no doubt in my mind that Townsville, already well known for its high flood risk, has been hit by the worst floods in living memory.
“So far 15,571 claims have been lodged (90 per cent domestic, 10 per cent commercial), with losses of about $606 million. Insurers are prioritising 457 residential properties identified as unliveable. They have already provided $17.5 million in support, emergency accommodation and repairs.”
It’s already known that Suncorp has seen its claims from the Townsville flooding trigger its aggregate reinsurance protection, as we wrote yesterday, given that an expected A$97 million of claims from the Queensland flooding in the Townsville area have now eroded the rest of the retention on its natural hazard aggregate reinsurance program.
But other primary insurers are also expected to tap into their reinsurance towers to support their paying of claims from the Townsville flooding, suggesting the potential for some losses to flow to ILS funds or collateralized players that back any of these programs.
As our sister publication Reinsurance News reported earlier this week, Brisbane-based insurer RACQ reported that its losses from the floods would likely be between $30 million and $50 million, but said they should be limited to just $20 million after its reinsurance protection kicks in.
Other insurers seen as particularly exposed include IAG, QBE, Youi, Allianz and AIG, which are all likely to experience, although for most of these their retentions are high and the losses would need to either escalate or, like Suncorp, trigger an aggregate reinsurance layer they have in place.
The flooding in North Queensland is yet another significant Australian severe weather related loss and we understand that catastrophe loss data aggregator PERILS AG is investigating the Townsville floods to see whether it is going to cause an industry loss event significant enough to deserve reporting on, based on property claims only.