Australia’s bushfire risk more focused on grasslands & crops this year due to La Niña

A forecast for Australian bushfire risk for the summer months of December 2020 through February 2021 suggests that forested areas could see normal levels of risk, while higher-risk is seen for grassland or crop growing areas of the south and in particular south east of the country.

Australia suffered significant bushfires last summer, as tinder dry forests burned and caused rising economic costs, as well as impacts to the local insurance market and global reinsurance sector.

The Insurance Council of Australia (ICA) estimates that insured bushfire losses during the accepted seasonal months reached almost AU $2.34 billion last year, with more than 38,600 claims filed with insurers due to fire impacts from the season.

That drove some insurers to call on occurrence and also aggregate reinsurance support, with an element of bushfire attrition even seen for some ILS fund strategies.

The 2020/21 bushfire season in Australia may see a different range of threats, as La Nina conditions have taken hold and Australia has had higher rainfall levels as a result.

But this has led the Bushfire and Natural Hazard Cooperative Research Centre to predict a greater than normal risk of grassland starting bushfires this year, as rainfall has stimulated much more growth.

In its seasonal bushfire outlook, the BNHCRC explains, “Australia’s climate is now under the influence of La Niña, and as a result the landscape and weather conditions continue to be vastly different to the previous two years. The year to date has seen average to above average rainfall across much of the south east and north west of the country. This rainfall continued through spring, resulting in prolific grass growth in south eastern and central areas. Grass and crop fires are the main concern in these locations for the summer months as the growth dries out in the warmer weather. Grass and crop fires are fast moving and can spread rapidly when fanned by strong winds.

“These conditions mean that large parts of New South Wales west of the Great Dividing Range face above normal fire conditions, as well as grassland areas of the ACT and into north eastern Victoria. Western Australia has largely missed out on the rainfall in 2020 and conditions are very dry, with parts of the south and south west coasts expecting above normal fire conditions through summer.”

Despite the fact large fires were seen last season around east coast areas and rainfall has been higher than normal, the BNHCRC still forecasts normal levels of fire risk conditions for these forested areas, “due to the long-term dryness that still persists and the significant amount of area that was not burnt.”

While La Niña climate conditions suggest higher rainfall levels through the summer months, the BNHCRC still warns of these months are typically dryer anyway and that in some areas, such as southern parts of South Australia and Western Australia have largely missed out on recent rainfall and remain very dry.

The climatological outlook suggests wetter than average conditions are very likely for most of Australia except western Tasmania, where there is an increased chance of drier than average conditions.

At the same time, average maximum temperatures for December to February are likely to be higher than the long-term average for Victoria, Tasmania, the far west of WA, the northern coastlines of NT and Queensland, parts of eastern SA, southern Queensland, and western NSW. But below the long-term average for south coast WA north east WA, and north west NT.

The tropical cyclone season is another factor that could affect bushfires, the BNHCRC warns, who say that tropical cyclone activity is likely to be more active than in recent years for Queensland, the NT and WA due to the influence of La Niña.

Bushfire risk is a growing contributor to annual catastrophe losses for Australian insurers and also a growing cost to the global reinsurance market and some ILS funds that support those primary carriers.

The full bushfire outlook can be found here.