Jan. 10 (Bloomberg) -- Insured losses triggered
by flooding across Queensland are “modest” and
well within the capacity of the nation’s insurance
companies, said Robert Whelan, chief executive
officer of the Insurance Council of Australia.
“Although this is a very major weather event,
from an insurance point of view it’s still fairly
moderate,” Whelan said in an interview with
Bloomberg News today in Sydney. “While this is
still significant, it’s not one of the more major
events we’ve had to deal with over the last 12
months.”
Queensland is experiencing its worst floods in 50
years, forcing the evacuation of 4,000 people and
affecting about 1 million square kilometers
(386,000 square miles), or an area the size of
France and Germany. Whelan reiterated the
Insurance Council ’s preliminary estimate that
insurers may pay out A$150 million ($150 million)
from 4,300 claims received.
“By way of comparison, the industry received
161,000 claims for A$1 billion in losses after one
20 minute hail-storm in Perth, ” Whelan said.
Many homes in the flood zones aren’t insured,
and damage caused by water normally costs less
to repair than bush fires which require dwellings
to be replaced, he said.
Still, claims are likely to continue growing in
coming weeks as heavy rain over southeast
Queensland worsens flooding in regional towns
including Gympie, Maryborough and Dalby, and
threatens to affect parts of the capital of Brisbane.
Early Claims
Suncorp Group Ltd. said Dec. 31 that it had
received about 1,450 claims from across
Queensland state since Christmas Eve from
customers affected by the floods and that it
expected numbers to increase as waters recede
and people return to their homes. Insurance
Australia Group Ltd. said Jan. 4 it has received
about 600 claims stemming from floods in
Queensland and that it ’s too early to estimate the
final cost of the claims.
Suncorp shares have declined 4 percent since
Dec. 24, while IAG has slipped 1.3 percent. The
benchmark S&P/ASX 200 index has lost 1.5
percent in the same period.
A torrent of rain in the 24 hours through 5 a.m.
local time will push the Mary River at Gympie to a
“ major flood level” of above 20 meters (66 feet)
tomorrow, the Australian Bureau of Meteorology
said on its website today. Upstream at
Maryborough levels peaked at around 8.2 meters
yesterday, and may climb again if heavy rainfall
continues.
Damage to the state’s transport network currently
stands at around A$1.5 billion, Queensland Roads
Minister Craig Wallace said today.
Dollar Weakens
“Frankly we just don’t know the final impact yet,”
Wallace said in an e-mailed statement. “Very few
stretches of road have been left untouched by
weakened surfaces, potholes, verges and road
base washed away or more serious structural
damage. ”
Southeast Queensland Water will release water
from Wivenhoe Dam above Brisbane, causing
minor flooding in the city ’s outer suburbs of
Savages and Mt Crosby, with “moderate flood
levels” expected overnight, the weather bureau
said.
Australia’s dollar was near a three-week low as
the flooding continued.
Authorities have also issued a flood warning for
Dalby, a town about 210 kilometers (130 miles)
west of Brisbane.
Renewed concern about a deluge in southeast
Queensland comes as the Balonne River through
the town of St George yesterday rose less than
forecast, to within 20 centimeters of its record
flooding last year, the weather bureau said.
Lost Exports
“We had the bad fortune of a previous flood, but
what we learnt out of it was how to manage it
better, ” Queensland Senator Barnaby Joyce told
Sky News in an interview yesterday.
Queensland Premier Anna Bligh has estimated the
bill from the disaster, which has closed mines
and spoiled crops, may be more than A$5 billion.
The state is Australia ’s largest coal exporter and
accounts for about 20 percent of the nation’s A
$1.3 trillion economy.
The region is losing A$480 million a week in lost
coal exports, said Mark Pervan, head of
commodity research at Australia & New Zealand
Banking Group Ltd. in Melbourne. About 160
million metric tons of annual coal production has
been halted under force majeure contract clauses,
equivalent to 41 percent of the world’s export
coking coal supply, and 8 percent of global export
thermal supply, he said.
Eleven people have died in floodwaters in the past
few weeks and an estimated 200,000 people in
the state have been affected, according to
Queensland police. Police said a 19-year- old
woman drowned Jan. 8 while swimming in a
swollen creek.
The federal government has received over 8,000
claims for emergency assistance from homes
and businesses, paying out over A$10 million,
Prime Minister Julia Gillard told reporters in
Canberra today.
‘Doing it Tough’
The government will also subsidize those whose
salaries have been cut because of floods, Gillard
said. “We’ve seen extreme weather events in
many parts of the country. There are a lot of
Australians doing it tough facing very stressful
circumstances. ”
Australia had its third-wettest year on record in
2010, according to the weather bureau, which
says showers and storms will continue across
Queensland this week.
The rain has destroyed cotton crops, halted coal
deliveries, shut mines and prompted producers
including BHP Billiton Ltd. and Rio Tinto Group to
declare force majeure, a legal clause allowing
them to miss contracted deliveries.
It will be at least a month before coal operations
return to normal, Macarthur Coal Ltd. Chairman
Keith De Lacy said on Bloomberg Television
today. The company has resumed “a little bit of
mining,” he said. Macarthur is the world’s largest
producer of pulverized coal used in steelmaking.
The “timing of the recovery depends on the rain,”
ANZ Bank’s Pervan said in a note to investors Jan.
7. “The rub is that the wet season normally peaks
in February/March, so risks remain high for an
extended delay. ”
--With assistance from Angus Whitley in Sydney,
Rebecca Keenan in Melbourne and Rishaad
Salamat in London. Editors: Malcolm Scott, Ed
Johnson.
Source: http://www.businessweek.com/news/2011-01-09/queensland-floods-within-capacity-of-insurers-as-deluge-worsens.html
by flooding across Queensland are “modest” and
well within the capacity of the nation’s insurance
companies, said Robert Whelan, chief executive
officer of the Insurance Council of Australia.
“Although this is a very major weather event,
from an insurance point of view it’s still fairly
moderate,” Whelan said in an interview with
Bloomberg News today in Sydney. “While this is
still significant, it’s not one of the more major
events we’ve had to deal with over the last 12
months.”
Queensland is experiencing its worst floods in 50
years, forcing the evacuation of 4,000 people and
affecting about 1 million square kilometers
(386,000 square miles), or an area the size of
France and Germany. Whelan reiterated the
Insurance Council ’s preliminary estimate that
insurers may pay out A$150 million ($150 million)
from 4,300 claims received.
“By way of comparison, the industry received
161,000 claims for A$1 billion in losses after one
20 minute hail-storm in Perth, ” Whelan said.
Many homes in the flood zones aren’t insured,
and damage caused by water normally costs less
to repair than bush fires which require dwellings
to be replaced, he said.
Still, claims are likely to continue growing in
coming weeks as heavy rain over southeast
Queensland worsens flooding in regional towns
including Gympie, Maryborough and Dalby, and
threatens to affect parts of the capital of Brisbane.
Early Claims
Suncorp Group Ltd. said Dec. 31 that it had
received about 1,450 claims from across
Queensland state since Christmas Eve from
customers affected by the floods and that it
expected numbers to increase as waters recede
and people return to their homes. Insurance
Australia Group Ltd. said Jan. 4 it has received
about 600 claims stemming from floods in
Queensland and that it ’s too early to estimate the
final cost of the claims.
Suncorp shares have declined 4 percent since
Dec. 24, while IAG has slipped 1.3 percent. The
benchmark S&P/ASX 200 index has lost 1.5
percent in the same period.
A torrent of rain in the 24 hours through 5 a.m.
local time will push the Mary River at Gympie to a
“ major flood level” of above 20 meters (66 feet)
tomorrow, the Australian Bureau of Meteorology
said on its website today. Upstream at
Maryborough levels peaked at around 8.2 meters
yesterday, and may climb again if heavy rainfall
continues.
Damage to the state’s transport network currently
stands at around A$1.5 billion, Queensland Roads
Minister Craig Wallace said today.
Dollar Weakens
“Frankly we just don’t know the final impact yet,”
Wallace said in an e-mailed statement. “Very few
stretches of road have been left untouched by
weakened surfaces, potholes, verges and road
base washed away or more serious structural
damage. ”
Southeast Queensland Water will release water
from Wivenhoe Dam above Brisbane, causing
minor flooding in the city ’s outer suburbs of
Savages and Mt Crosby, with “moderate flood
levels” expected overnight, the weather bureau
said.
Australia’s dollar was near a three-week low as
the flooding continued.
Authorities have also issued a flood warning for
Dalby, a town about 210 kilometers (130 miles)
west of Brisbane.
Renewed concern about a deluge in southeast
Queensland comes as the Balonne River through
the town of St George yesterday rose less than
forecast, to within 20 centimeters of its record
flooding last year, the weather bureau said.
Lost Exports
“We had the bad fortune of a previous flood, but
what we learnt out of it was how to manage it
better, ” Queensland Senator Barnaby Joyce told
Sky News in an interview yesterday.
Queensland Premier Anna Bligh has estimated the
bill from the disaster, which has closed mines
and spoiled crops, may be more than A$5 billion.
The state is Australia ’s largest coal exporter and
accounts for about 20 percent of the nation’s A
$1.3 trillion economy.
The region is losing A$480 million a week in lost
coal exports, said Mark Pervan, head of
commodity research at Australia & New Zealand
Banking Group Ltd. in Melbourne. About 160
million metric tons of annual coal production has
been halted under force majeure contract clauses,
equivalent to 41 percent of the world’s export
coking coal supply, and 8 percent of global export
thermal supply, he said.
Eleven people have died in floodwaters in the past
few weeks and an estimated 200,000 people in
the state have been affected, according to
Queensland police. Police said a 19-year- old
woman drowned Jan. 8 while swimming in a
swollen creek.
The federal government has received over 8,000
claims for emergency assistance from homes
and businesses, paying out over A$10 million,
Prime Minister Julia Gillard told reporters in
Canberra today.
‘Doing it Tough’
The government will also subsidize those whose
salaries have been cut because of floods, Gillard
said. “We’ve seen extreme weather events in
many parts of the country. There are a lot of
Australians doing it tough facing very stressful
circumstances. ”
Australia had its third-wettest year on record in
2010, according to the weather bureau, which
says showers and storms will continue across
Queensland this week.
The rain has destroyed cotton crops, halted coal
deliveries, shut mines and prompted producers
including BHP Billiton Ltd. and Rio Tinto Group to
declare force majeure, a legal clause allowing
them to miss contracted deliveries.
It will be at least a month before coal operations
return to normal, Macarthur Coal Ltd. Chairman
Keith De Lacy said on Bloomberg Television
today. The company has resumed “a little bit of
mining,” he said. Macarthur is the world’s largest
producer of pulverized coal used in steelmaking.
The “timing of the recovery depends on the rain,”
ANZ Bank’s Pervan said in a note to investors Jan.
7. “The rub is that the wet season normally peaks
in February/March, so risks remain high for an
extended delay. ”
--With assistance from Angus Whitley in Sydney,
Rebecca Keenan in Melbourne and Rishaad
Salamat in London. Editors: Malcolm Scott, Ed
Johnson.
Source: http://www.businessweek.com/news/2011-01-09/queensland-floods-within-capacity-of-insurers-as-deluge-worsens.html
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