Insurance firms hit by $4bn in claims

Insurance firms hit by $4bn in claims

21 December 2011

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Australia — Floods, cyclones, bushfires and storms have cost more than $4 billion in insurance claims across Australia.

The catastrophies destroyed lives, homes, businesses and farms, and Insurance Council of Australia (ICA) chief executive Rob Whelan ranked them as some of the worst in recent times.

Insurers received nearly 190,000 claims in 2011, with a total reserved value of $4.39 billion.
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Releasing the annual figures on Wednesday, Mr Whelan urged federal and state governments to do more to safeguard communities.

“Unless governments improve land use planning and building codes, remove some of the cost impediments to taking out insurance, and build the physical barriers to protect those at risk, communities will remain vulnerable,” he said.

The Queensland floods had the most expensive recovery bill, with 58,463 claims totalling $2.4 billion.

Queenslanders were hit with a double whammy with cyclone Yasi, which resulted in 72,203 claims amounting to $1.33 billion.

Floods and severe storms also battered Victoria while Perth was surrounded by a wall of flames.

The February blazes resulted in 410 claims costing $35 million.

When Margaret River went up in flames later in the year it cost $52.3 million from 392 claims.

“Though most homes and businesses have now been repaired in these areas, work continues on many others, pending various approval processes and decisions being made by policyholders,” Mr Whelan said.

He said in the wake of a catastrophe insurers were there to step in, but it was up to governments to prevent the worst of the fallout by acting pre-emptively.

“It’s the role of governments to put in place the measures that make our communities safer places in which to live, especially those with a known exposure to risk from events such as flooding, cyclones and bushfires,” Mr Whelan said.

“We remain concerned that new communities may be built in inappropriate areas with houses that are not designed to be robust in disasters.”

Australia’s catastrophes were a significant contributor to global catastrophes, with reinsurer Swiss RE calculating disasters such as the New Zealand earthquakes, Thai floods and Japanese tsunami had cost the world economy about $US350 billion ($A348.38 billion) this year.


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