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* Cost of floods to insurers seen at close to $1 bln
* Reinsurance will protect Australian insurers
* IAG says gets 2,400 claims, analysts see ins margin forecast intact
* Suncorp shares up 0.6 pct, IAG up 1.6 pct (Adds details, fund manager comments, analyst straw poll, shares)
By Narayanan Somasundaram
SYDNEY, Jan 13 (Reuters) - The devastating floods in Queensland state that forced evacuation in Brisbane, Australia's third-largest city, are expected to be a near $1 billion event for insurers, though reinsurance is seen covering more than half of it.
That would mean the flood cost to insurers would rank along with the Perth and Melbourne storms last year and the Victorian bush fires in 2009, data from the Insurance Council of Australia showed.
In the first estimates of insurance claims tied to the floods, that are seen shaving up to 1 percent off GDP, Queensland state's top insurer Suncorp said reinsurance protection would limit its costs at up to A$90 million.
"The reality of it is, the event is so big that it is some
one else's problem now. It is over to the reinsurers," said
Paul Biddle, a fund manager at Celeste Funds Management,
which owns Insurance Australia Group
shares.
Analysts said the reinsurers impacted
included General Reinsurance, Swiss Re , Munich Re
"The market will get some sense now," Biddle said, referring to the more than 10 percent drop in Suncorp shares in the past month on fears of mounting claims.
Shares in Australian insurers were all higher on Thursday, with Suncorp up 0.6 percent, rebounding from a five-month low hit on Wednesday. IAG shares were up 1.6 percent in afternoon trade.
CLAIMS SO FAR
IAG said it has got 2,400 claims so far from the events tied to southeast Queensland and 1,200 due to heavy rains late last year in the state, which would cost it up to A$30 million.
While IAG said it was too early to assess the impact of the floods in Brisbane, analysts put the number at well below the reinsurance trigger of A$150 million.
Other insurers, who play a meaningful role in the region include QBE Insurance , Allianz and RACV Insurance. These insurers have not commented on the claims and the total cost is based on the average of four analysts' views.
IAG should be able to meet its insurance margin forecast of 10.5 to 12.5 percent and still have about two-thirds of its
A$300 million weather-related allowance left for the half year for future events, the analysts said.
IAG has said it has a natural peril allowance of A$435 million for the year and it would use up to A$140 million in the six months to December.
Analysts, who raised their earnings forecasts by between 5 and 10 percent last week for IAG, said they would shave off half of it after IAG's announcement.
While reinsurance protected a cost blowout for Suncorp, it surprised investors with a A$120 million cost to reinstate reinsurance cover. This forced analysts to cut already narrowed forecasts by a further 10 to 12 percent.
The reinsurance reinstatement would give Suncorp cover for a further two events between now and June, analysts said. (Reporting by Narayanan Somasundaram; Editing by Sonali Paul and Dhara Ranasinghe)