CATASTROPHE DECLARED AFTER SERIOUS HAILSTORM HITS MELBOURNE

The hailstorm that struck Melbourne on Christmas Day has formally been declared a catastrophe, the eighth of 2011, a move which Insurance Council of Australia CEO Rob Whelan said would mean the launching of an insurance taskforce, with the Australian Prudential Regulatory Authority monitoring the industry's response. More than 10,000 vehicles were damaged by a hailstorm that struck Melbourne on Christmas Day, but insurers expect the number of claims to rise as people return from holidays to discover damage to cars and houses. A similar storm that struck the largest city in Victoria in March 2010 caused insured damage of around AUD500m (then $460m) (IIN 24, March 16 2010). However, the latest storm travelled through northern suburbs in a narrower band. Insurers have also received 5,000 claims relating to home damage. Mr Whelan said that it was too early to provide an accurate estimate of losses. Claims centres were initially overwhelmed because most staff were on their seasonal break, but Mr Whelan said that hundreds of staff had volunteered to return from their holidays to ease the strain. The hailstorm struck the northern suburbs of Taylors Lakes, Keilor, Eltham, Greensborough and Keilor Downs hardest. On December 27 Mr Whelan said that insured losses could be in the tens of millions of Australian dollars. He also noted that insurable losses as a result of natural catastrophes in Australia in 2011 were likely to be more than AUD4.5bn, compared with AUD2.14bn in 2010.