January 18th, 2011

Update: Floods in Eastern Australia

Posted at 10:34 AM ET

austral-flood-18smallParts of Victoria State in Australia are now under water as the heavy rains that devastated Queensland State have continued to move south. The floods in Queensland are finally starting to recede, having affected 86 towns and cities and forced thousands of people to evacuate their homes. The floodwaters in Queensland covered an area the size of France and Germany combined at their peak, initially hitting central and southern areas of the state in late December/early January before spreading east and affecting the city of Brisbane and its surrounding areas. The floods are being described as the worst to hit Queensland in more than 50 years, having killed 20 people, devastated dozens of communities, destroyed infrastructure and crippled the coking coal industry in the region. Several towns and cities were cut off or inundated by the floodwaters, with around 200,000 people affected and thousands of properties flooded. The damage bill, estimated at AUD/USD5 billion before southeast Queensland came under threat, is now expected to increase significantly. One early estimate suggests the floods may cost the (re)insurance industry up to AUD/USD6 billion.

The floods were initially triggered by a period of heavy and persistent rain in Queensland towards the end of 2010, possibly as a result of a strong La Niña event. The situation was exacerbated when Tropical Cyclone Tasha made landfall in Queensland in late December (some 16 kilometers to the south of Cairns), bringing more heavy rain to the region. According to Australia’s Bureau of Meteorology (BoM), up to 300 millimeters (12 inches) of rain fell in 24 hours in parts of Queensland as Tasha came ashore and some coastal areas received 250 percent above-average rainfall during this time. 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, the Weir River and more recently the Mary River, the Bremer River and the Brisbane River. The rainfall recorded during the week of January 10 near Brisbane fell on saturated ground, exacerbating the flooding that preceded it. Overtopping consequently occurred along rivers in southeast Queensland, resulting in severe flooding in Toowoomba, Ipswich and Brisbane.


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.


The Brisbane River peaked around one meter (3.3 feet) lower than originally forecast on January 13, but widespread flooding still occurred in Brisbane as 67 suburbs were affected. The Brisbane River peaked at 4.46 meters (14.6 feet) at 04:00 local time, around one meter below the level reached during the devastating floods of 1974, when a third of the city’s metropolitan area was flooded and at least 6,700 homes were inundated. However, due to Brisbane’s considerable development during the past 35 years, many more people were affected by the 2011 floods. Officials currently estimate that 11,900 homes in Brisbane were seriously damaged by the floodwaters and another 14,700 homes were partially inundated. Businesses were also badly hit, with around 2,500 commercial properties completely inundated and another 2,500 partially flooded.

Parts of Brisbane Central Business District (CBD) were flooded, with northern areas reportedly worst affected. Several businesses in the CBD were forced to close as the floodwaters rose but reports say the area reopened on January 17. There has been no official estimate on the number of flooded properties in the CBD as of yet. Elsewhere in Brisbane, the worst-hit suburbs included Brisbane City, St Lucia, West End, Rocklea and Graceville where the floodwaters reached the roofs of houses in some parts, according to reports. Streets in the city were largely empty after the center of Australia’s third-largest city was effectively shutdown. Around 3,500 people fled to evacuation centers and power was cut to around 100,000 households in the region. Although power had been restored to around 80,000 households as of January 17, officials warn some residents could be without power for weeks.

In the nearby town of Toowoomba, the heavy rain triggered severe flash flooding that saw an eight-meter (26 foot) wall of water sweep away cars following more than 36 hours of incessant rain. Reports said the deluge, described as an inland tsunami, devastated homes and infrastructure in the town. A huge search-and-rescue operation was mounted in Toowoomba, with helicopters winching people to safety. However, at least 14 people were killed in the town and another 12 remain missing. In the city of Ipswich, reports said 3,000 buildings were under water and 2,000 people relocated to five evacuation centres after the Bremer River peaked at around 19 meters (62 feet). Reports said dozens of businesses in Ipswich’s CBD were badly flooded. The city of Gympie was also inundated after the Mary River burst its banks while entire houses were swept off their foundations in Grantham.

Reports said a total of 86 towns and cities in Queensland were badly flooded, with thousands of properties inundated. Before the flooding in southeast Queensland, nine areas in southern and central Queensland were declared disaster zones (Rockhampton, Emerald, Dalby, Chinchilla, Bundaberg, Theodore, Condamine, Alpha and Jericho). The city of Rockhampton (population of around 75,000) was badly hit 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 peaked at 9.2 meters (30 feet) at Rockhampton. Mayor Brad Carter said the water was expected to drop to 8.5 meters (28 feet) by January 16 and recede more quickly after that. Officials said some 1,000 people evacuated their homes in Rockhampton at the height of the floods, but there has been no official estimate on the number of inundated buildings.

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 were badly hit, including Chinchilla, Condamine, Dalby, St George and Emerald. Much of Chinchilla was under water, with around 60 homes and businesses inundated, according to officials. 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. According to reports, floodwaters have returned to Dalby and Condamine over the last couple of days, flooding hundreds more buildings.

The flooding has also closed hundreds of roads in Queensland, including nine major highways, while Queensland Rail and TransLink has reported major disruption on all train lines. Damage to telecommunication infrastructure is expected to take months to repair. 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 40 of Queensland’s coal fields, forcing mining companies to declare force majeure. This represents 75 percent of operations in the region and it is likely to take several months before production is restarted. Flooded railways have also disrupted coal transportation and, last week, the Queensland Resource Council (QRC) said the floods could cost the state coal industry an estimated USD1 billion in production. More recently, Queensland’s Resources Minister, Stephen Robertson, said the state was losing up to AUD100 million a day in coal exports. 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. An early estimate by farming lobby group AgForce suggested crop losses alone could exceed AUD1 billion.

As the Queensland floods and rains have moved south, major rivers in the states of New South Wales and Victoria flooded some communities, forcing thousands of people to leave their homes. Several communities in New South Wales, including New Angledool, Yamba, Iluka, Boggabilla, Toomelah, Goodooga, Weilmoringle and Maclean, were cut off after the Clarence River burst its banks. In Victoria, meanwhile, reports said floodwaters have swamped 43 towns, affecting 1,600 properties. Emergency services in Victoria had received more than 5,000 requests for help as of 17 January and an additional 20 communities are expected to be hit by the floodwaters in the coming days. Reports said around 3,500 people have left their homes so far while the town of Horsham, situated around 300 kilometers (190 miles) northwest of Melbourne, is facing the prospect of a one-in-200-year flood event, threatening around 500 properties. The Wimmera River, which run through Horsham and is also threatening another 12 small towns, is expected to peak on January 18. Damage has already been reported in the towns of Echuca and Rochester after the Campaspe River burst its banks and flooded hundreds of properties. Fears that flooding would reach the suburbs of Melbourne have eased after officials downgraded their warning for the Maribyrnong River. Reports said Victoria has recorded its wettest month since records began after more than 200 millimeters (8 inches) fell in western and northern regions in the past week alone, compared with a weekly January average of 20 to 30 millimeters (0.8 to 1.2 inches).

The Australian government has said the flooding may be the most costly natural disaster ever to have hit Australia. Economic loss estimates have jumped from the initial AUD5 billion suggested by Prime Minister Julia Gillard, and a member of Australia’s central bank has warned the Queensland flooding alone could cut 1 percent off projected economic growth, equal to almost AUD13 billion. There remains considerable uncertainty about how the floods will impact (re)insurers as cover for flood damage is not standard in many buildings and contents insurance policies in Australia. According to AIR Worldwide, residential flood coverage varies considerably by insurer and location in the country while commercial policies generally include flood coverage. However, reports said coverage for flood in crop insurance policies is limited.

Despite this, the Insurance Council of Australia (ICA) has said insurers have already received over 7,000 claims worth AUD365 million, excluding industrial and mining claims and the impact on Brisbane. Furthermore, AIR has said insured losses from the floods could reach AUD/USD6 billion. AIR’s preliminary figures are based on an estimate of AUD/USD2 billion for the insured losses arising from events in the region of Rockhampton and other parts of central Queensland in December and another AUD/USD4 billion for the floods that affected Brisbane and the surrounding area in January. If accurate, this would rank among Australia’s most costly insured events in history.

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, Brisbane City Council, Sydney Morning Herald

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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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