News detail

Lloyd's has been called on for insuring tongue

10/03/2009

Scott Vincent

AUSTRALIA has dominated major loss news in recent weeks, thanks largely to the devastating wildfires that hit Victoria state last month.

The last week has seen confirmation from the Insurance Council of Australia that claims from the fires have passed the A$1bn ($635m) barrier. ICA said its member companies had now completed 80% of all insurance assignments for domestic, commercial, farming and industrial claims received from the fires, but were still unable to access some regions for assessments.

The number of claims received now totals 8,150. Around 83% of claims relate to property and contents damage, while the remaining 17% account for motor losses. Domestic claims make up 76% of the loss, with the remaining 24% accounted for by farming, commercial and industrial claims. A large number of bushfire victims were uninsured, and an advisory panel has been established to examine how these people should benefit from the A$200m donations received so far.

As Insurance Day went to press, it looked as though Australia had escaped the worst of another potentially catastrophic loss in the form of cyclone Hamish. Hamish had intensified to the equivalent of a category four hurricane over the weekend, but has managed to remain on a course parallel to the Queensland coast of Australia.

By Monday morning, Hamish was a category three strength storm, carrying maximum sustained winds of 127 miles per hour. The storm was following a path parallel to the coast but situated around 150 miles offshore, meaning its hurricane-force wind span of 45 miles was not affecting land. The storm was expected to veer away from land, and decay to a category one hurricane within the next 24 hours or so. But this does not mean Queensland will completely escape – the Bureau of Meteorology has warned of high tides and large waves as a result of the storm, which bring the potential for more flooding in the state.

Elsewhere, the last seven days have seen confirmation that fire claims in the UK have reached their highest level since the Association of British Insurers began collecting fire data more than 20 years ago.

According to ABI figures, fire damage costs have risen 16% on the previous year to £1.3bn ($1.8bn), including £865m of commercial property losses. Domestic property losses totalled about £408m.

This week has also seen a major property loss in Germany, with the Cologne City Archive building unexpectedly collapsing last Wednesday. Earlier indications suggested that the building, which fell into a subway below, had collapsed as a result of destabilising of the foundations caused by the extension of the city’s subway system. The cost of damage will take some time to survey, but the City of Cologne issued a statement saying the contents of the building, some of which is believed will not be recovered, were insured for €400m ($503m). One medieval manuscript attributed to Albertus Magnus has been valued at around €4m.

Local transport authority Kilner Verkehrsbetriebe, which is developing the extension, said it is covered by policies bought from Lloyd’s and HDI-Gerling, with coverage of €30m per incident. An HDI-Gerling spokesman confirmed that KVB had construction cover with the company, which will come into effect following the collapse. The sum insured is about €1m. The building is covered by conventional building cover for €12.2m, and the archive’s contents are covered by an all-hazard policy of €60m. There is some debate as to what other cover is in place – the head of Cologne City’s Cultural Department said contents were covered by a policy with Axa, but an Axa spokeswoman said this policy only covered fire losses and would not be applicable in this case.