Flood bill hits $1bn, with losses expected to hit $2.5bn by end

The Insurance Council of Australia says losses across the states have already hit $1bn and could climb to levels similar to that of the Black Summer bushfires.

The Insurance Council of Australia is warning losses from the floods could hit $2.5bn. – Picture: Richard Walker

Floods that have crashed across Queensland and NSW are set to cost as much as $2.5bn, according to estimates by the peak body for insurers.

Speaking on Friday, Insurance Council of Australia chief executive Andrew Hall warned the industry expected the costs of the floods would be similar to that of the Black Summer bushfires.

“The bushfire crisis cost us $2.5bn two years ago. I expect it will be starting to approach that territory within weeks,” Mr Hall said.

The ICA reported 67,537 claims arising from the floods by Friday, up 12 per cent on Wednesday’s levels.

Almost 76 thirds of claims were from Queensland, with 24 per cent from NSW.

The ICA noted 82 per cent of total claims were due to property damage, with most of the remainder for motor vehicles.

The ICA estimates the estimated current cost of total claims was over $1bn but likely to rise.

“This is an ongoing and severe weather event, so it is still too early to predict where it will end,” Mr Hall said.

The heavy rains that drenched parts of Northern NSW and south East Queensland have now lashed Sydney, inundated areas of the city’s west with many homes hit by floods in 2021 now again underwater.

“Last year’s flooding events that occurred in the Hawkesbury and Nepean topped out at $900m,” Mr Hall said.

The Sydney component of the March 2021 floods cost insurers $596m and triggered 58,000 claims.

Flood waters at Windsor have closed the bridge and several major roads. Pictured is the Windsor Bridge. Picture: NCA NewsWire / David Swift

Listed insurer QBE has disclosed almost 3000 claims and counting from catastrophic weather that has hit NSW and Queensland, warning it expected more in coming weeks.

QBE said while it was too early to determine the financial impact of the floods, the insurer held a maximum event retention of $125m for non-peak events in Australia.

QBE’s maximum catastrophe allowance of $962m, including a first quarter 2022 allowance of $248m.

QBE said it remained focused on supporting customers.

The insurer, with operations in several European countries, also noted it had a limited exposure to the events in Ukraine.

It said any insured losses associated with the conflict would not have a material impact on the group.

Listed insurer stablemate IAG reported 13,364 claims from the floods, with most for damage to homes, property and motor vehicles.

This is more than double the claims reported by IAG on Tuesday.

IAG assured investors its $75m maximum event retention would guard against a loss blowout and there was no change to the view from reinsurers around its classification as a single event.

Suncorp now reports more than 19,000 claims for flood damage across Queensland and NSW.

Suncorp’s net exposure for the natural catastrophe is limited to $75m, however if the floods continue they may trigger a rollover in the insurer’s reinsurance period.

This could see Suncorp incur a further $5m loss on the event, but the remainder would return to the reinsurer.