Australian floods could hit Lloyd's insurers

Four Lloyd’s insurers have had their profit forecasts slashed by RBS analysts over mounting losses from the New Zealand earthquake and potential payouts to the Australian floods.

Chaucer, Catlin, Hiscox, and Lancashire saw their full-year pre-tax profit estimate cut by a fifth because of the earthquake in September last year.

Analysts predicted that there are likely to be further losses from the floods, City AM reports.

Analyst Joanna Parsons said: “It seems likely that there will be some notable claims arising from the disaster, especially regarding business interruption and potentially from flooded mines."

Meanwhile, Insurance Australia Group (IAG) and Suncorp’s shares have taken a hammering as investors take fright over payouts relating to the Queensland floods.

IAG’s share price fell to A$3.75 today, only a month after breaking through the A$4 barrier. Suncorp, led by former Aviva chief executive Patrick Snowball, has suffered a drop from A$8.90 to A$8.30 in a month.

Even before flooding destroyed the regional centre of Toowoomba, analysts tipped that insurance losses could exceed A$1bn (£635m).

And now that the flooding is set to hit Brisbane, the third largest city in Australia, the pace of claims is expected to rise rapidly.

Suncorp has so far received around 2,500 claims, while IAG has received about 900 claims, up from 600 a week ago, reports the Sydney Morning Herald.