Cost of storm damage that swept Hunter Valley and Central Coast likely to hit $1.5 billion
Posted by gmarkets on 22 September, 2007
The cost of the damage caused by the devastating storms that swept through the Hunter Valley and Central Coast in June is likely to hit $1.5 billion in terms of insurance payouts reported The Sydney Morning Herald (25/8/2007, p. 6). Fourth-largest loss suffered by the insurance industry in Australia: The bill for the catastrophic storms, which were accompanied by widespread flooding on the NSW coast, represents the fourth-largest loss suffered by the insurance industry in Australia. It dwarfs the estimated $540 million in claims made in the wake of Cyclone Larry, which swept through North Queensland in March last year. Only the Sydney hailstorm of April 1999 (total insurance bill $1.7 billion), the Newcastle earthquake in December 1989 ($862 million) and Cyclone Tracy, which destroyed Darwin on Christmas Eve in 1974, caused greater damage.
IAG already 65,000 claims put cost at $1 billion: Estimates of the final bill , range between $1.2 billion and $1.5 billion, although Insurance Australia Group (IAG), which owns one of the biggest local companies, NRMA Insurance, indicated yesterday that it will be towards the top of the forecasts. About 65,000 claims covering damage to homes, cars and small to medium-sized businesses have been received by members of the Insurance Council of Australia, which represents 90 per cent of the country’s insurers. It puts the cost of those claims at $1 billion, up from $750 million a month ago. IAG has paid $500 million in claims in the past two months, which cut its annual profit by $200 million. The company subsequently called on insurance from re-insurers to cover about two-thirds of its costs.
Suncorp also likely to pay out hundreds of millions: It received more than 16,000 claims from the Hunter and Central Coast and has dealt with more than 5400 building repairs. NRMA also leased seven hectares of land at different sites to store cars that had been written off because of damage caused by the storm. IAG’s major competitor, Suncorp, which owns the insurers AAMI and Vero, has indicated in recent weeks it is also likely to have paid out hundreds of millions of dollars after receiving 19,000 claims from policy-holders in the region.
The Sydney Morning Herald, 25/8/2007, p. 6