Australia could be at risk of more severe flooding this year as experts predict an above average tropical cyclone season for the region. The Australian Bureau of Meteorology posted their tropical cyclone season outlook recently and are urging people to prepare for the rainy season as climate models point to another La Niña season, although slightly weaker than last year.
Over the whole of Australia the forecast is for an 80% chance of having more than the long-term average number of cyclones during the season, the long-term average is 12. The western and eastern regions face a 65% chance of above average cyclone formation while the north-western and northern region face a 60% above average cyclone season.
After the severe flooding and widespread devastation caused in the eastern region last year, Australian’s will be hoping for a calmer year with less torrential rainfall.
Re/insurers will also hope for a calmer year after facing significant losses in Australia last season. For the catastrophe bond market there is little threat as the only cat bonds we are aware of which cover Australian cyclone risks are the two series of Sector Re V Ltd. cat bonds (details can be found in our Deal Directory) which were privately placed by Swiss Re.