BRISBANE, Australia—Insured losses from devastating flooding in the Australian state of Queensland are expected to top $6 billion and experts say the floods likely will be treated as multiple events for reinsurance coverage.

Meanwhile, the flooding that spread earlier this month to the heavily populated state of Victoria means that insured losses may increase further, though experts say it is too early to estimate the final tally.

Twenty people are known to have died and thousands were evacuated as floods swept through Queensland in December and January. At one point, flooding in Brisbane, the state's largest city and the third-largest city in Australia, forced about 95% of businesses in its central business district to close.

The mining industry was hit hard by the floods, with an estimated $2.3 billion Australian ($2.28 billion) in lost sales caused by the wet weather, according to the Queensland Resources Council.

By last week, about 15% of the state's coal mines were operating at full capacity, with 60% operating with restrictions and 25% yet to resume normal operations, according to the council.

Tourism, another major industry in Queensland, was identified as one area that the government-backed Flood Recovery Taskforce would assist.

The Australian Chamber of Commerce & Industry welcomed formation of the recovery task force, which includes several business leaders.

Queensland Premier Anna Bligh also said last week that a royal commission is to investigate the state's flood preparedness and disaster response, among other things. An interim report is to be published in August with a full report next year.

Estimates of insured losses from the floods have increased.

The Insurance Council of Australia said it had been notified of losses of about $365 million Australian ($361.2 million) from the Queensland flooding as of mid-January, up from its previous estimate of $150 million Australian ($148.5 million).

Catastrophe modeler AIR Worldwide Corp. estimated that insured losses from the floods could reach $6 billion Australian ($5.94 billion).

And last week, Barclays Capital said insured losses could top $6 billion and could affect the earnings of Bermudian reinsurers, among others.

The floods that first hit Queensland in December likely will cost insurers about $2 billion and affect 2010 accounts, according to Barclays' analysis. The second stage of the flooding, which occurred during January, likely will cost $4 billion, it said.

Reinsurance losses from the first phase of the flooding are likely to be about $1 billion, according to analysis by Keefe, Bruyette & Woods Inc. in London.

KBW Analyst Christopher Hitchings said the second phase of flooding could be a “much worse” reinsurance loss, but will affect 2011 catastrophe accounts. Lloyd's of London companies likely will have about a $50 million share of reinsurance losses from the 2010 floods, he added.

Joanna Parsons, an insurance analyst at Royal Bank of Scotland P.L.C., also said Lloyd's companies could face losses, particularly from business interruption claims and flooded mines.

Wing Chew, a senior analyst at Moody's Investors Service Inc. in Sydney, said that while Australian insurers' profits will be hit by the floods, they will not be a “material credit event” because insurers have extensive reinsurance programs and the majority of claims will be on personal lines policies, among other things.

The largest insurer in Queensland, Suncorp Group Ltd., said its losses would be limited thanks to its “comprehensive reinsurance program.”

Brisbane-based Suncorp said the December flooding likely would result in pretax losses of $130 million Australian ($128.7 million) to $150 million Australian ($148.5 million) for the company.

Suncorp said the January flooding likely would result in losses of $70 million Australian ($69.3 million) to $90 million Australian ($89.1 million).

Suncorp, which operates on a financial year that ends June 30, also said it likely would incur additional reinsurance costs of about $120 million Australian ($118.8 million) “to reinstate multiple covers for the remainder of the financial year.”

Insurance Australia Group Ltd., which also has a large exposure in Queensland, said claims from heavy rain and flooding in December likely would be from $10 million ($9.9 million) Australian to $30 million Australian ($29.7 million).

It is too early to estimate the cost of the January flooding, IAG noted, which will be included in the company's results for the second six months of its financial year, which also ends June 30.

In a statement, IAG CEO Mike Wilkins said the company's catastrophe reinsurance program for 2011, which renewed Jan. 1, was structured similarly to 2010. Under that program, he said, the group's maximum-event retention for a first event in 2011 is $150 million Australian.

As of last week, QBE Insurance Group Ltd. had not released a flood loss estimate.

Australian insurers expect the floods to be classed as two or more events, which will have an impact on the retentions insurers will take, said John Birch, a director in the financial institutions arm of Fitch Ratings Ltd. in Sydney.

He said that while Fitch believes the floods will be treated as multiple events, “confirmation won't be made until discussions and claims are finalized between the primary insurers and their reinsurers.”

In addition, he said, flooding in Victoria adds to the uncertainty.

If the floods are classed as multiple events, then primary insurers will take more retention and incur a larger share of the gross loss than if the floods were deemed to be a single event, he said.

While the number of properties affected by flooding in Victoria was low, situations can change quickly as the floods in Brisbane and nearby Ipswich demonstrated, Mr. Birch said.

Underwriters in London expect the floods to be classed as two or more separate events, said one London-based source who asked not to be named.

The floods likely will not become a “capital event” for reinsurers in the London market, he added.

Heavy commercial losses, such as business interruption and claims from mines, likely will fall into 2010 coverage, he added.