Australia Battered by Storms, Floods

February 25, 2000

Monsoon driven rains continued to dump water on central and Northeastern Australia, knocking out bridges, flooding highways and isolating many small communities. The Thomson River was expected to crest at 6 meters (19.8 feet) on Thursday, its highest level on record.

The floods will only add to the woes of Australia’s beleaguered insurers, who have suffered a terrible year of disaster. Following the recent announcement that Reinsurance Australia (ReAc) would go into run off due to losses, came the announcement by AMP that it’s acquisition of ailing insurer GIO had caused a net loss in the company’s earnings of A$424 million ($262 million).

The GIO losses of A$1.47 billion ($908 million) exceeded most estimates, and contrasted with AMP’s profit last year of A$1.03 billion ($636 million). At the same time AMP announced £80 million ($128 million) in cost cutting measures in its UK operations, which will cost 1250 jobs at its British subsidiaries Pear and NPI.

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