The first trickle of Queensland flood claims has appeared on the balance sheets of insurers, according to data from the Australian Prudential Regulation Authority (APRA).

Gross incurred claims in the December quarter have risen 18% since the same period in 2009, resulting in a 10% profit slump as the impact of flooding in Far North Queensland began to show.

The March and June quarters are likely to reveal huge losses for insurers as the full weight of the Queensland floods, Cyclone Yasi and Christchurch earthquake is borne by insurers.

While the $5.9 billion in claims recorded by APRA between October and December 2010 was down on the previous quarter’s $6.5 billion – impacted by the first Christchurch earthquake – APRA warned the March quarter would reveal larger losses.

“The majority of the impact of the floods will be in the following quarter, due to the more extensive flooding which occurred in January 2011,” APRA said in its Quarterly General Insurance Performance update.

Despite the losses, the insurance industry remains profitable, with $1.1 billion banked in the December quarter, although reinsurance profits fell by 63% since the corresponding period in 2009.

Insurers wrote $8.6 billion in gross earned premium during the December quarter, up 2% on the previous quarter.