PERILS estimates Cyclone Debbie insured market loss of AUD1.116 billion

PERILS AG, the Zurich-headquartered provider of catastrophe insurance loss data and indices, has now released its initial insured property market loss for Tropical Cyclone Debbie, of AUD1.116 billion (just over US$820 million).

Cyclone Debbie impacted parts of Queensland and New South Wales, Australia, from March 28^th 2017 into the early days of April, with the remnant low from the storm also impacting the North Island of New Zealand, although this is not included in PERILS’ loss survey.

“Cyclone Debbie is the first loss event captured by PERILS in Australia and comes only half a year after the initial release of the PERILS Industry Exposure Database for the territory. Debbie clearly exceeds our property market loss reporting threshold of AUD 500m and made a significant impact on the insurance and reinsurance industry.

“As such, the event underpins the need for reliable natural catastrophe insurance data for Australia, which PERILS strives to provide,” said Darryl Pidcock, Head of PERILS Asia-Pacific.

According to PERILS the maximum gusts recorded during Cyclone Debbie occurred on Hamilton Island at 263 km/h. Storm surge from the event was moderate, which was largely a result of landfall that had taken place between low and high tide and, the fact the landfall area was guarded by the Whitsunday Islands, explained PERILS.

However, moderate storm surge was offset by “exceptional” rainfall, with 643 mm within 24 hours in Clarke Range, which created surface water and river flooding across parts of Southeast Queensland and Northeast South Wales.

Eduard Held, Head of Products, PERILS, said; “PERILS’ second loss report will be issued on 28 June and will include an update of the country-wide market loss and the number of affected polices. Subsequent loss reports will provide loss data at four-digit postcode level and by property lines of business. This will help to further improve the industry’s understanding of Australian tropical cyclone risk and ultimately facilitate its tradability.”

Market sources had previously suggested that the insured loss from Debbie to Australia would be in the range of AUD1 billion up to 2011’s cyclone Yasi at AUD1.4 billion, after the Insurance Council of Australia (ICA) reported in early April that insured losses had reached AUD660 million.

The expectation remains that reinsurance capital providers, which includes insurance-linked securities (ILS) fund managers and collateralized reinsurance vehicles that are exposed, will take a substantial share of the overall insured market loss from the impact of cyclone Debbie, and only time will tell if the figure continues to rise in the coming months.

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