Fitch Ratings says the NSW/Queensland floods will impact insurers’ earnings as more bad weather is predicted for this week.

The industry has already received more than 163,850 claims from the catastrophe, according to latest available data from the Insurance Council of Australia (ICA).

ICA, which provided the figures on its Twitter account on Friday, says based on previous flood events the estimated cost of claims is now $2.451 billion.

Fitch Ratings says it expects net losses to primary insurers from the extreme weather in late February and early this month to be much lower than ICA’s current gross loss estimate due to high reinsurance recoveries.

But the rating agency expects gross losses may rise further as the Bureau of Meteorology (BOM) forecasts the ongoing La Nina weather event to lead to above-median rainfall in the second quarter for much of northern and eastern Australia.

“Recent flooding and severe storms in south-east Queensland and NSW will affect insurers’ earnings rather than their capital, as a result of strong reinsurance programs,” Fitch Ratings said.

“Insurers’ robust earnings and capital headroom should ensure their ratings remain resilient to these effects.

“However, higher modelled catastrophe losses and rising reinsurance costs in the face of increasingly frequent extreme weather events, coupled with reduced appetite from global reinsurers, pose risks to insurers’ credit profiles over the medium term.”

Fitch Ratings says IAG and Suncorp – which command more than 50% of non-life premiums – will bear most of the losses while QBE Insurance Group will also be affected, albeit to a lesser extent, through its retail insurance operations.

IAG and Suncorp have already used a large portion of their retentions under aggregate reinsurance programs in response to events leading up to the recent floods, which should allow them to cede losses to reinsurers faster, Fitch Ratings said.

Meanwhile the BOM issued a severe weather warning today for NSW, predicting heavy rainfall in the Northern Rivers region and parts of Mid North Coast and Northern Tablelands.

“A coastal trough is expected to deepen over northeastern NSW causing heavy rainfall with embedded thunderstorms,” the BOM said.

“Locally intense rainfall leading to dangerous and life-threatening flash flooding is possible with thunderstorms with six-hourly rainfall totals in excess of 180 mm.”

The BOM says a flood watch is current for parts of northeast NSW.