January 5th, 2011

Floods in Queensland, Australia

Posted at 11:36 AM ET

australia-jan-floods-smallHeavy rain has triggered severe floods across a huge swathe of Queensland State in Australia, affecting around 200,000 people and inundating thousands of buildings in the affected towns and cities. An area the size of France and Germany combined in southern and central Queensland has been badly affected by the floods, with several communities cut off or inundated and coal mine production disrupted. Australian Prime Minister Julia Gillard has described the situation as “a major natural disaster” and said recovery would take “a significant amount of time”. As of January 4, the Australian Bureau of Meteorology (BoM) has eight flood warnings in place in Queensland. Queensland State Premier Anna Bligh said the economic damage from the floods was likely to run into the billions of dollars. The Insurance Council of Australia (ICA) has declared the floods a catastrophe but no insured loss estimates have been released.

The floods were triggered by a period of heavy and persistent rain in Queensland towards the end of 2010, possibly as a result of the La Niña weather pattern. The situation was exacerbated when Tropical Cyclone Tasha made landfall in Queensland as a weak tropical storm in late December (some 16 kilometers to the south of Cairns), bringing more heavy rain to the region. According to the BoM, up to 300 millimeters (12 inches) of rain fell in 24 hours in parts of Queensland as Tasha came ashore. The heavy rain caused major flooding along several rivers, including the Fitzroy River, the Burnett River, the Condamine River, the Balonne River, the Dawson River, the Mackenzie River, the Nogoa River and the Weir River.

australia-jan-floods-big

Hazard data illustrated in the CAT-i map was taken from i-aXs®, Guy Carpenter’s web-based risk management platform. i-aXs users can view impacted areas on any map as well as see how their portfolios were affected. Please contact your broker or GC AnalyticsTM representative for assistance or go to www.i-axs.info for further information.

Officials have described the floods as the worst to hit Australia in decades and at least three people have been killed. Reports said 22 towns and cities in Queensland have been badly flooded, with thousands of properties inundated. Nine areas in southern and central Queensland have been declared disaster zones (Rockhampton, Emerald, Dalby, Chinchilla, Bundaberg, Theodore, Condamine, Alpha and Jericho). The city of Rockhampton (population of around 75,000) is currently surrounded by water after the Fitzroy River burst its banks, isolating it from the rest of the country after all transport links were severed. The BoM said the Fitzroy River was 9.15 meters (30 feet) at Rockhampton and “rising slowly with major flooding”. Officials said some 1,000 people have evacuated their homes in Rockhampton, with authorities expecting the floodwaters to reach their peak in the next 12 to 18 hours. Military aircraft are currently being used to drop supplies to residents and Rockhampton Mayor Brad Carter said large areas of the city might be under water for another two weeks.

Elsewhere, officials in Bundaberg said the town was isolated by rising floodwaters, inundating around 300 homes and 120 businesses. The community of Theodore was also cut off, leaving hundreds of people stranded and prompting a rescue operation, supported by military helicopters, to evacuate all of the town’s 300 residents. Several other towns and villages have also been badly hit, including Chinchilla, Condamine, Dalby and Emerald. Reports said much of Chinchilla remains under water, with around 60 homes and businesses inundated. Reports said the flooding in Dalby was the worst since 1981, damaging the town’s water treatment plant and threatening the supply of drinking water. In Emerald, officials described the flooding as the worst on record, with about 80 percent of the town submerged and some 1,000 homes inundated by water from the Nogoa River. In Condamine, meanwhile, floodwaters hit record levels, with officials warning the town could remain abandoned for a week. Residents in the southern town of St George are also on heightened alert after the BoM warned rising floodwaters could inundate 80 percent of the town.

The flooding has closed hundreds of roads across Queensland, including nine major highways. Industrial and agricultural interests have also been affected by the floods. Queensland is the world’s biggest exporter of coal used in steel-making and the floodwaters have brought production and shipments overseas to a virtual standstill. State officials said the floods had halted operations at 75 percent of Queensland’s coal fields. Flooded railways have also disrupted coal transportation and the Queensland Resource Council (QRC) said the floods had cost the state coal industry an estimated USD1 billion in production. Crop losses are also likely to be significant. The floods have severely disrupted the planting and harvesting of key crops such as cotton, sunflower, sugar, wheat and barley. Early estimates by farming lobby group AgForce suggest crop losses alone could exceed AUD1 billion.

It is still too early to provide an insured loss estimate, according to the ICA. The biggest insurance payout for a flood event in Queensland is currently AUD410 million for the Mackay floods of 2008, reports said. According to AIR Worldwide, residential flood coverage varies considerably by insurer and location in Australia while many commercial policies include flood coverage. However, reports said coverage for flood in crop insurance policies is limited.

Sources: Reuters News, BBC News, Associated Press, Agence France Presse, The Queensland Times, Australian Broadcasting Corporation, Australian Associated Press, Best’s Insurance News, The Australian

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Guy Carpenter publishes CAT-i reports for major natural catastrophes worldwide. These reports cover catastrophes including worldwide tropical cyclones, earthquakes, major UK and European floods and any other natural event that is likely to incur a significant loss to the (re)insurance industry. Please email CAT.i@guycarp.com if you wish to be added to the free email distribution list.

Guy Carpenter compiles RISK-i reports for major technological or man-made events worldwide. These reports cover risks to property, transport and life including explosions, fires, crashes, engineering disasters and terrorist attacks that are likely to incur a significant loss to the (re)insurance industry. Please email RISK.i@guycarp.com if you wish to be added to the free email distribution list.

Hazard data illustrated in the CAT-i map was taken from i-aXs®, Guy Carpenter’s web-based risk management platform. i-aXs users can view impacted areas on any map as well as see how their portfolios were affected. Please contact your broker or GC AnalyticsTM representative for assistance or go to www.i-axs.info for further information.

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