NU Online News Service, Feb. 3, 2:48 p.m. EST
Aon Benfield said economic damages from flooding in Australia during the month of January currently stand at about $5.65 billion and economic losses could reach between $10 billion and $20 billion after the cost of repairing and rebuilding.
Simultaneously, catastrophe modeler EQECAT said it expects economic losses from Tropical Storm Yasi—which made landfall early Thursday in Queensland, Australia as a Category 5 storm—to be $2 billion to $5 billion. EQECAT based its estimate on the losses of a similar storm, Larry, in 2006.
The reinsurance intermediary of Aon Corp., Aon Benfield, released its “Monthly Cat Recap” report published by Impact Forecasting. Steve Jakubowski, president of Impact, said flooding in Australia during January has been “absolutely devastating” on an economic level because dozens of mines in Queensland have been hit and will not reopen for months.
“The assessment of this cost from a business interruption perspective will be an ongoing challenge for the reinsurance industry,” he added.
Yasi made landfall near the tourist village of Mission Beach, about 70 miles south of the city of Cairns, with a population of more than 150,000, according to modelers AIR Worldwide and Risk Management Solutions (RMS).
Winds from Yasi destroyed homes, traffic lights, and downed trees and power lines, said RMS. Damage estimates vary widely. More than 100,000 people are without power, RMS and AIR reported.
About four inches of rain fell within 24 hours and another eight inches is forecast to fall as the storm goes inland, RMS said.
Again comparing Yasi to Larry, RMS said Yasi made landfall farther to the north as a larger and stronger storm than Larry. According to the Insurance Council of Australia, Cyclone Larry resulted in $547.7 million of insured damage.
Reinsurer PartnerRe Ltd. recently said Australia flooding in December is expected to cost the company between $25 million and $35 million, to be recorded in 2010 fourth-quarter results. Chubb Corp. recently said the first round of flooding in late 2010 did not affect the insurer, but it expects 2011 flood-related losses of between $75 million and $100 million to dampen first-quarter earnings—an estimate made before this latest flooding.
Queensland-based insurer SunCorp said that as a result of its combination of the catastrophe and aggregate reinsurance programs, Suncorp expects its net claims costs from Yasi will be capped at $10 million.
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