Flood costs pass $4 billion, overtaking Newcastle earthquake

Insured losses from the record flooding in Queensland and NSW earlier this year have climbed to $4.3 billion to be Australia’s fourth costliest disaster, the Insurance Council of Australia (ICA) said today.

The estimated losses – nearly double Brisbane’s 2011 flood’s $2.3 billion – are from 216,465 claims across both states.

More than a fifth of claims are already closed and almost $1 billion paid to policyholders so far.

The huge catastrophe bill – which is the highest recorded for an Australian flood event – is only overtaken by the 1999 Sydney hailstorm ($5.57 billion), 1974’s Cyclone Tracey ($5.04 billion), and 1967’s Cyclone Dinah ($4.69 billion).

The 1989 Newcastle earthquake recorded $4.24 billion in insured losses on a normalised loss basis – a way of calculation to give a present-day perspective of historical events.

The jump from the ICA’s previous estimate of $3.4 billion was due to claims progressing, as well as an increase in larger commercial claims.

CEO Andrew Hall says keeping Australia insurable as extreme weather events worsen requires governments to invest in appropriate physical mitigation and adaptation strategies.

“Insurers and the Insurance Council look forward to working with the government to implement its $200 million Prevent, Repair, Rebuild package, to better protect Australian homes and communities from the impacts of extreme weather,” he said.

From February 22 to March 9, intense and sustained rainfall led to flooding from Maryborough in Queensland down to Grafton in NSW. Many areas received more than half their average annual rainfall in just a week.

The Mary River at Gympie recorded its highest flood peak since 1893, hitting a height of 22.96 metres, while NSW’s Lismore suffered devastating flooding as the Wilsons River hit a record 14.4 metres, exceeding the former record set in 1954 by more than two metres.

The ICA is holding community forums in flood-impacted areas across both states.

Catastrophe data company Perils has warned no common reinsurance market standard will apply and event definition clauses will vary across reinsurers – with some including meteorological conditions and loss aggregation periods such as a 168-hour clause.

IAG, Suncorp and QBE have said their claims impact will be limited because of reinsurance programs.