INSURANCE COUNCIL DECLARES FLOODS WORST CATASTROPHE SINCE CYCLONE OSWALD
Written on the 3 April 2017 by Ben Hall
AS widespread flooding from ex-Tropical Cyclone Debbie continues to wreak havoc in Queensland and New South Wales, the Insurance Council has expanded its catastrophe declaration and estimated losses in excess of $1 billion.
As the massive clean-up continues across the two states, the central Queensland town of Rockhampton is bracing for potentially its worst flood in 60 years as heavy rain from the past five days spills down the Fitzroy River.
The Insurance Council of Australia (ICA) added northern New South Wales to its catastrophe declaration after Lismore and Murwillumbah were flooded on Friday where hundreds of homes are expected to be deemed uninhabitable.
"This level of catastrophe has not been seen since ex-TC Oswald in 2014, when storms and flooding affected large parts of Queensland and NSW and caused insurance losses of almost $1.2 billion," ICA CEO Rob Whelan says.
Whelan says 7,500 insurance claims had been lodged by Queenslanders at midday last Friday but is expecting the number of claims to rise sharply in the coming weeks.
"This is only the early stage of a natural disaster and I expect the insurance losses could reach into the hundreds of millions of dollars as householders and businesses return to their properties and lodge claims," Whelan says.
"I assure NSW Premier Gladys Berejiklian and Queensland Premier Annastacia Palaszczuk that the insurance industry is harnessing its resources to help customers in a fair and timely manner."
Cyclone Debbie hit the Queensland coast between Bowen and Airlie Beach as a category 4 system on Tuesday and developed into an intense tropical storm which delivered record amounts of rainfall as it moved slowly south into New South Wales.
The heavy rain has also crippled coal shipments in Queensland. Gladstone is the only port capable of handling traffic and it is expected this could push the price of coal higher.
Rail and freight operator Aurizon says all of its services have been seriously impacted and forecast it would result in a downgrade to its full year earnings.
"There will be a change in timing of when income is received and costs are incurred which is likely to have a negative impact on FY2017 network earnings," an Aurizon spokesman says.
"The temporary closure of the coal systems will have a negative impact on FY2017 volumes and earnings.
"However, it is too early to assess whether there will be a change to Aurizon's FY2017 volume and EBIT guidance. As soon as the company has more clarity on the length of system closures and the options available to mitigate the loss of volumes, a further update will be provided.
"Road and rail access is severely restricted to many parts of the rail network. Aurizon will provide the estimated recovery times for the respective coal rail systems to customers and supply chain partners as soon as we have an informed position."
The company says it has mobilised repair crews on the four coal systems of Newlands, Goonyella, Blackwater and Moura and estimated these corridors would take between one and five weeks to become operational.
Meanwhile the sugar cane industry has put a figure of $150 million on its damage cost from Debbie, with harvesting due in a few months' time.
The worst affected areas have been Proserpine ($50 million), Mackay ($81 million) and Plane Creek ($18 million).
Business News Australia
Author: Ben Hall