Insurers say premiums won’t rise as large retailers shut down following Queensland floods

Target has been forced to close five stores and The Reject Shop has shut down one location as the devastation wrought by ex-tropical cyclone Oswald is assessed.

The Reject Shop, which suffered a huge amount of damage in the 2011 floods, has activated its $2 million flood barrier system at its Ipswich distribution centre in an attempt to limit the damage.  

The major telcos have also been struggling to get services back online. Optus was the latest to confirm all its major centres were again running in Queensland.

However, there is some relief. Suncorp has issued a statement saying it doesn’t expect premiums to increase as a result of the weather so far, saying reforms issued by the 2011 floods have generated better coverage.

”Obviously there have been premium increases in the last couple of years but those premiums are now reflecting the actual risk [from severe weather events], which has increased,” a Suncorp spokesperson told Fairfax.

”But the first half of this financial year was relatively benign and we have allowances in place to cover events exactly as we’re seeing right now.”

The Insurance of Council of Australia also said in a statement the industry has already received thousands of claims, saying it’s “highly possible” there will be more wild weather before the end of the season.

Businesses’ worst fear is a repeat of the 2011 floods. Following the disaster, the Queensland tourism industry took a dive and has only just begun to recover. The ICA has estimated losses of almost $4 billion in the past three years due to dangerous weather.

A spokesperson for the Tourism and Transport Forum said this morning businesses needed to do all they could to ensure customers knew their locations were open for business, warning the perception of disaster could permeate through to non-affected areas.

“Businesses need to get the message out after the emergency has subsided,” he said. “It’s sometimes difficult to counter the images that are on the news.”

This is a modified version of an article that first appeared on LeadingCompany’s sister site, SmartCompany.

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