Commercial claims push Cyclone Marcia insurance losses beyond AU$400 million

An influx of commercial claims from businesses affected by Cyclone Marcia in February has ratcheted up the reserved value of insurance losses to AU$403.6 million, the Insurance Council of Australia (ICA) reported Thursday.

That AU$403.6 million total relates to 29,565 claims reported to date, notes a statement from ICA.

Marcia prompted ICA to declare a catastrophe for parts of central Queensland. After making landfall, widespread structural damage was reported in Yeppoon and Rockhampton when strong winds blew off roofs, uprooted trees and cut power lines. Heavy rainfall also caused localized flash flooding.

Rail lines and coastal ports were temporally suspended, catastrophe risk modelling firm RMS noted at the time. The company further noted that many roads between central Queensland and the southeast coast were flooded.

In the Mar. 12 statement, ICA chief executive officer Rob Whelan notes that most claims received to date are for domestic policies in Yeppoon and Rockhampton and neighbouring towns. “A large proportion of the properties severely damaged or destroyed by Cyclone Marcia were older buildings with poor resilience to the impact of cyclones and storms,” Whelan explains.

He suggests, however, that “there is a silver lining to this catastrophe. Most insured properties will be rebuilt or repaired to today’s cyclone building standards, which will ensure they have greater resilience to cyclones that may affect the region in the future.”

With regard to the recent influx of commercial claims, Whelan reports that insurance companies are now handling hundreds of business claims lodged via insurance brokers.

“These business claims are for a wide range of cyclone-related losses, from property and vehicle damage to business interruption. Many of these cases are quite complex,” he comments, adding that a steady rise in claims over the past couple of weeks was to be expected following a catastrophe.