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Weather bureau predicts more wild weather for -

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Weather bureau predicts more wild weather for south-east Aust

AM - Friday, 21 December , 2007 08:27:00

Reporter: Ashley Hall

TONY EASTLEY: Residents of some parts of Victoria are mopping up after a series of brief but
intense rainstorms overnight.

There was flash flooding in Melbourne and Geelong, and it isn't over yet. Weather forecasters are
predicting widespread rain, thunderstorms and strong winds will hit South Australia, Victoria,
Tasmania and New South Wales today and tomorrow.

The storms, predicted to be some of the worst this year, will arrive just as many holiday-makers
hit the road for their Christmas break.

Ashley Hall reports.

ASHLEY HALL: Collapsed roofs, smashed windscreens, and sodden carpets are just a few of the things
insurers fork out money for after a storm.

The more they pay out, the more we pay them in premiums. The insurer Suncorp Metway yesterday
announced that three separate extreme weather events since July had cost the company between $230
and $260 million.

Suncorp's chief executive is John Mulcahy.

JOHN MULCAHY: In July we saw some storms in New Zealand which accounted for approximately $20
million. Then there was the Lismore storm in October, where the cost to the group was approximately
$60 million. So when you add those two events to the Sydney event, then you can see that the cost
of the group is in the range of $230 to $260 million.

ASHLEY HALL: Earlier this week, Suncorp's closest rival, Insurance Australia Group, blamed bad
weather when it slashed its profit forecasts by $150 million.

John Mulcahy says the cost of insurance premiums will have to rise to recoup the losses.

JOHN MULCAHY: Yeah, look, there's no doubt that prices will increase. I think that will probably
escalate even further now that you'll see more price increases.

ASHLEY HALL: And Dr Penny Whetton from the Centre for Australian Weather and Climate Research says
the weather is only expected to get worse as greenhouse gas emissions rise.

PENNY WHETTON: As the atmosphere warms up and can hold more moisture, heavy downfalls when they
occur, have the likelihood of being more intense. So that increases the risk of flash flooding
events.

ASHLEY HALL: It's thought global warming may also ramp up the intensity of tropical cyclones and
hail storms.

Dr Whetton says it's difficult to accurately predict the intensity of future storms.

PENNY WHETTON: The main way that we can predict the future climate, changes in climate due to the
enhanced greenhouse effect, are the results that come from our global climate models. But they
produce information which is fairly broadscale, like hundreds of kilometres between the points
where we have information. And severe weather can be much more local than that.

So, we actually have to use more indirect techniques to interpret what the climate models are
saying to be able to say something about extreme weather events.

ASHLEY HALL: Insurance companies are running their own set of figures. But just how much extreme
weather events will push up the premiums is unclear, even to the insurers.

The banking and insurance analyst at Commsec, Carlos Castillo, says the unpredictable weather
conditions are making it difficult for insurers to plan for catastrophes.

CARLOS CASTILLO: The insurers definitely point to the fact that we've had a much higher frequency
of natural disasters, particularly storms in the last few years. They pin that on climate change,
and so that they're trying as best they can factor that in, to the pricing of their policies.

But it's hard for them to do that when they don't have the historical information, because a lot of
the pricing in insurance generally is based on historical performance. And when you've had such a
large change in the frequency of storms, it can play havoc with their pricing model.

ASHLEY HALL: The only thing that's certain: premium holders will be paying more.

TONY EASTLEY: Ashley Hall reporting.