The insurance industry loss from cyclone Debbie has continued to rise, with data from the Insurance Council of Australia (ICA) showing that almost AU$900 million of insured losses have now been recorded from 56,135 claims, an increase of 36% since the 11th April.
An ICA representative told Artemis that insured loss data collated by the ICA shows that claims reported and assessed now give a total industry loss of AU$897 million, approximately US$670 million as of 17th May 2017.
That’s an increase of 36% over the AU$660 million reported on 11th April and the number of claims filed has increased by 37%, so almost in-line with the increased financial cost that insurance and reinsurance interests face.
As a reminder, global reinsurance company Swiss Re estimated an insurance industry wide loss of US$1.3 billion due to cyclone Debbie’s impact, while loss data provider PERILS AG estimated an industry loss of AU$1.116 billion, which is just over US$820 million, while reinsurance broker Aon Benfield recently estimated that losses from Debbie would near US$970 million.
Based on the ICA’s latest figures the industry toll due to cyclone Debbie is well on its way towards the PERILS estimate, but has some way to go to reach Swiss Re’s. However, the ICA’s figures are based on the primary insurance sector claims, many of which will take a significant length of time to be settled, so the final tally is likely to rise significantly from the new AU$900 million total we report today.
The true cyclone Debbie industry loss for insurance and reinsurance interests to pay, which could also see some small losses paid by collateralized players or insurance-linked securities (ILS) funds that are exposed, could be a little higher, as all these estimates are for losses suffered in Australia only.
Cyclone Debbie struck parts of Queensland and New South Wales, Australia, from March 28th 2017 into the early days of April, but the remnant low from the storm also impacted the North Island of New Zealand with rainfall and flooding, causing some property damage there as well.
The expectation is still that reinsurance providers, which will include some ILS fund managers and collateralized reinsurance vehicles that have exposure, will pay a significant proportion of the overall insured market loss from the impact of cyclone Debbie. Capital markets exposure is expected to be a limited portion of this, with some exposure due to reinsurers sidecar vehicles and retrocession perhaps factoring into this.
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