Australian insurance firms count cyclone cost

SYDNEY - Suncorp-Metway, Insurance Australia Group and other insurers are counting the cost of Cyclone Larry, with more than 1400 claims received with an estimated cost of "tens of millions of dollars."

Larry, the most powerful storm to hit Australia in 30 years, damaged more than half the buildings in Innisfail in northern Queensland, according to disaster management groups.

"Claims were starting to come in as communications were restored and insurers had received over 1400 claims for damage to homes, cars and commercial buildings," Graham Jones, co-ordinator of the Insurance Disaster Response Organisation, said yesterday. Claims were "expected to be tens of millions of dollars".

The Australian Government has pledged immediate cash payments to people left homeless by the category 5 storm. Larry packed winds of 290 km/h, tearing through Innisfail, a town of 8000 people about 1700km north of Brisbane, on Monday.

About 140,000 homes and businesses in north Queensland were left without electricity at the peak of the outages as the cyclone brought down power lines and damaged transmission towers, said Ergon Energy, a Queensland Government-owned energy supplier. Most of those homes are also without water and sewerage, said the Queensland State Disaster Management Group.

National Australia Bank, the nation's biggest farm lender, said it might suspend mortgage repayments and waive fees for early withdrawal of term deposits for customers affected by the cyclone. ANZ Banking Group, the third-largest Australian lender, said it would suspend repayments on all loans for three months for customers hurt by the storm.

A spokesman for CGU, a unit of Sydney-based Insurance Australia, the nation's largest home and car insurer, said more than 300 home and vehicle claims, and 30 business insurance claims, had been received by Monday night for property damage caused by the cyclone.

Suncorp-Metway, the biggest insurer in Queensland, is providing temporary accommodation and cash advances for living expenses to customers whose homes are uninhabitable.

Brisbane-based Suncorp has sent a team of 40 damage assessors to the Cairns and Innisfail areas.

"It's far too early to have an estimate of insured losses," said Patrick Flynn, a spokesman for the Insurance Council of Australia.

Bob Buckley, head of the insurance division at Wesfarmers, which owns Wesfarmers Federation Insurance, said: "We're one of the bigger rural insurers, but we don't have much exposure in the Innisfail area. We'll cover the odd farm here and there, but it's still very early days to be estimating the cost."

- BLOOMBERG