Reinsurers are expected to incur claim costs from Cyclone Larry of more than $1 billion because most local insurers have capped claim levels for cyclone-related risks, according to ratings agency Fitch.

Out of the local insurers, it is expected IAG will be the most affected because it has a payment cap of up to $200 million before reinsurance kicks in. Claim costs for Queensland-based Suncorp Metway are likely to be capped at $100 million. Promina is understood to have a cap around $60 million before reinsurance kicks in.

The Insurance Disaster Response Organisation says insurers have so far received about 4000 claims worth about $90 million.