News detail

The Loss Register

17/03/2009

Scott Vincent

CYCLONE HAMISH reached category-four intensity in its approach to the Queensland coast earlier this month, sparking fears of severe destruction on land. However, the path of the storm – parallel to the Queensland coast – meant that it failed to cause the devastation on land that some had feared.

The storm’s strongest winds did not move close enough to coastal towns to cause anything other than minimal damage, although coastal towns north of Rockhampton suffered heavy rains and high winds.

But while it remained offshore, Hamish has still managed to cause a wave of destruction that has resulted in a environmental disaster for the region. As Hamish triggered high seas in the region, the cargo ship Pacific Adventurer lost 31 containers filled with ammonium nitrate fertiliser on Wednesday. As reported in yesterday’s Insurance Day, the potential claim could total up to A$1.5m ($991,932) if the Australian government finds Swire Shipping guilty of environmental breaches.

The resulting oil spill came after one container pierced the ship’s hull, unleashing a huge oil slick off the Queensland coast. Estimates of the size of the slick continue to grow and the federal government yersterday defended the Queensland government’s handling of the oil spill off the Sunshine Coast, saying oil recovery equipment could not be used during a tropical cyclone.

Swire Shipping issued a statement at the end of last week saying its insurers were talking to the authorities about the cost of the clean-up. There are concerns that the ammonium nitrate will have a severe impact on flora and fauna. Experts are concerned it could damage algal blooms, suffocate fish and destroy habitats. The disaster has triggered political fury and talk of a cover-up, with reports indicating bubbles of air can be seen in the slick where animals are trapped under the oil.

The last seven days have also seen further details emerge over the loss picture from the recent Victoria bushfires, where the claims toll is continuing to mount. The insured loss from the fires now stands at A$1.12bn, according to the Insurance Council of Australia, with 90% of claims now assessed. In total, 9,105 claims have now been received, of which 84% relate to property and 16% relate to motor damage.

The past seven days have also seen more details emerge of the losses in Ohio from the storm that formed in the aftermath of hurricane Ike last September. As reported in Insurance Day after the storm struck, the eventual cost of Ike to the insurance and reinsurance industry will be determined by whether wordings deem the inland storms in Ohio and other Midwest states to be the same event as the hurricane that battered offshore rigs and coastal states (Insuranceday.com, Oct 27, 2008).

As Ike dissipated, remnants of the storm merged with an existing extra-tropical cyclone, with the combination of the two systems bringing hurricane-force gusts to Ohio and other Midwest states.

An Ohio Insurance Institute (OII) re-survey of the September 14 post-Ike windstorm has in the last week shown reported losses have now risen to $721.4m, compared with a previous figure of $553.1m. The number of claims has increased by 70% to 230,163 from 135,317. The $721.4m figure includes losses of $541.1m for residential property, $22.5m of motor claims and $135.7m of commercial claims. OII said these figures represent 85% of Property Claim Services’ (PCS) Ohio claims and around 64% of the total insured loss picture. PCS has estimated Ohio suffered 270,000 claims totalling insured losses of $1.135bn from the windstorm which following Ike – a record windstorm loss for the state.