Only Cyclone Tracy (1974) and the Sydney hailstorm (1999) caused more insured losses, and this year’s East Coast Flood is the costliest flood in Australian history, analysts report.

Close to 225,000 insurance claims relating to the event have now been lodged across both states, an increase of 3.6% on last month’s count.

However, as claims assessments continue to be completed, insurance costs for the event have increased 12% on last month, ICA data shows, driven in part by increasing materials and labour costs.

Almost 30% of claims have been closed and $1.5 billion has already been paid to policyholders.

This week marked four months since the ICA first declared the floods as an insurance catastrophe.

The event stretched over several days and many claims were not made until days, weeks or months after the initial event, with locations like Lismore being hit for a second time at the end of March, generating many new or additional claim lodgements.

“The sheer scale of the extreme weather event that devastated Queensland and New South Wales is something we have never seen before, and the cost continues to rise,” said ICA CEO Andrew Hall.

“Money is flowing into these devastated communities with $1.5 billion already paid and this number increasing every day,” he continued. “Past experience has shown us that local councils need to be looking at what they can do to process the higher than usual number of development applications we expect to see as a result of this flood.”

“The time it takes for some property claims decisions to be made has been a consistent issue raised at our policyholder forums in New South Wales and Queensland,” Hall acknowledged. “There are clear obligations and regulations on insurers around claims, but ultimately the type of claim, the assessment required and the complexity of the repair or rebuild can impact that process.”

Source: https://www.reinsurancene.ws/2022-floods-among-australias-costliest-ever-disasters-ica/

The post 2022 floods among Australia’s costliest ever disasters: ICA first appeared on Garner Ted Armstrong Evangelistic Association.

According to ICA data, the number of insurance claims linked to the floods rose by 7.2% overnight to 126,511 claims in total.

Analysts at Honan Insurance Group believe that insured losses will soon exceed $2 billion, which would make this one of Australia’s costliest disasters ever, with widespread impacts for the re/insurance industry.

The immediate impacts, they say, include overreliance on the reinsurance market and could see global reinsurers becoming more stringent in their underwriting and impose more restrictions on cover in Australia due to perceived high risk

Additionally, Coverholders and Managing General Agents delivering losses into markets, such as the London-based Lloyds, may be required to tighten underwriting and limit any new business.

“Expect to see underwriting moratoriums on new business in some flood exposed regions,” said Poppy Foxton, National Head of Corporate Insurance and Risk Solutions at Honan.

“The consequences of this could be that only a select number of insurers will be able to afford and therefore offer flood cover, meaning a small group will need to support the many, which is unsustainable. Resulting rising costs and limited coverage could drive individuals in flood exposed areas to decide not to take out flood cover, leaving them exposed to risk.”

Analysts at Aon have similarly warned that the overall economic toll from flooding will also run into the billions.

Source: https://www.reinsurancene.ws/australia-flood-costs-creep-higher-2bn-bill-expected/

The post Australia flood costs creep higher, $2bn+ bill expected first appeared on Garner Ted Armstrong Evangelistic Association.