Insurers Feel Pinch of Natural Disasters
The winter storm that afflicted much of the United States in early February might cost insurers as much as $1.4 billion, and more roof damage may yet occur from snow accumulations in the Northeast. In Australia, Cyclone Yasi's destruction may cost $1.5 billion.
A stream of natural disasters continues to pummel Australia, with wildfires occurring in the western part of the country and an early estimate from catastrophe modeler AIR Worldwide indicating Cyclone Yasi inflicted up to $1.5 billion in insured losses last week. Prime Minister Julia Gillard on Monday announced she is forming a new Reconstruction Inspectorate to oversee rebuilding projects after devastating floods, Yasi's destruction, and now western wildfires.
AIR Worldwide estimates the winter storm that afflicted much of the United States in early February might cost insurers as much as $1.4 billion, and more roof damage may yet occur from snow accumulations in the Northeast.
Gillard said the inspectorate will evaluate contracts before they are signed and will scrutinize requires for reimbursement from local governments.
"We need to help flood affected communities rebuild their roads, their bridges, their rail lines and public facilities so they can get their lives back to normal," Gillard said Monday as she announced that John Fahey, former premier of New South Wales, will chair the inspectorate, which will report directly to the cabinet subcommittee that is guiding the government's work on natural disasters, which Gillard chairs.
"Clearly Australians know that around the nation we've got a lot of rebuilding to do," she said. "People have seen the damage on their TV screens, people know that we are coming back from an unprecedented series of natural disasters and that we are coming back from a flood crisis of unprecedented scale. People are familiar with the fact that three-quarters of Queensland was declared a natural disaster zone, that the city of Brisbane was shut down for days -- and that was before we saw the cyclone hit Queensland. People also know that we face natural disasters in other parts of the country and that New South Wales and Victoria in particular have had to battle floodwaters and Victoria continues to do so. Consequently, I believe as we rebuild from these large scale and widespread natural disasters, that it's appropriate to have these mechanisms to ensure that every dollar is a dollar that is spent effectively and every dollar spent from taxpayers' money goes to do work that is necessary to rebuild the nation."
Lloyd's of London, world-leading specialist insurance market with services in 200 countries, saw profits drop in the first half of last year because of a Chilean earthquake and the Deepwater Horizon oil spill. Lloyd's will announce full-year 2010 results on March 30.