Storm insurance claims jump to 17,000
The Insurance Council of Australia has declared a catastrophe for South East Queensland following days of wild weather and devastating floods, as the industry deals with more than 17,000 claims filed by policyholders as of Wednesday morning.
The move to extend the catastrophe to include South East Queensland comes after the ICA on Monday declared a catastrophe for NSW amid the record-breaking rains that pelted the east coast over the weekend and early part of the week.
Of the 17,000 claims received to date, 15 per cent were from Queensland, the ICA said.
The latest claims figure is a jump of more than 5,000, or 45 per cent, on the day prior.
The ICA estimates the total value of claims received across both states sits at $254.2m, based on the average cost of claims from previous similar events. This estimate is not based on the value of the actual claims, it cautioned.
Analysts have already tipped that the claims could eclipse last year's bushfire payouts but say reinsurance will do the heavy lifting.
Reinsurance sees insurers transfer portions of their risk portfolios to other companies, to protect against having to pay out large sums from insurance claims.
IAG, which houses well-known brands NRMA, CGU and Swann Insurance, has a single event retention of $169m before reinsurance kicks in, with this reducing to $135m for a second event.
Suncorp, in comparison, has a per-event retention of $250m.
But Morgan Stanley expects the catastrophe will add to reinsurance pricing pressure.
"Feedback from all reinsurers is (that) aggregate covers are proving costly, and we think this event adds to pressure for July renewals," the broker told clients in a note.
The February 2020 storms were a similar event, but with stronger winds, the analysts noted.
For that flood event, the industry saw around $900m gross claims.
After sitting in the red for the past two days, Suncorp shares rose 1.3 per cent on Wednesday to $10, while IAG rose 1.46 per cent to $4.85 and QBE gained 1.4 per cent to $9.72.
Separately on Wednesday, NAB announced a $3m disaster relief fund, with grants of $2,000 available to impacted customers and employees of the bank.
"To all the families, communities and businesses who have suffered damage to their homes and tragically lost pets, livestock and livelihoods, we are here to help you through this," NAB's executive for personal banking, Rachel Slade, said.
"We know that being there for our impacted customers and colleagues right now is important, but we also know we have a role to play in the long-term recovery."
The bank will provide immediate access to $2,000 grants to help cover costs such as temporary accommodation, food and clothing, as well as $2,000 business grants to help cover the cost of damaged property and equipment and for loss of stock or livestock.
Originally published as Storm claims jump to 17,000