The Australia flood event in February and March 2022 has now become the second costliest severe weather related catastrophe event in the country’s history, as claims continue to rise and the overall industry loss is now pegged at AU $5.134 billion by the Insurance Council.
The Insurance Council of Australia had last estimated the industry loss from the east coast flooding earlier this year at around AU $4.3 billion in June in an announcement.
PERILS had given its last estimate in June as well, opting for AU $4.9 billion.
Closest to the new estimate was reinsurance firm Munich Re, who in releasing its estimates for first-half catastrophe losses yesterday said it thought the Australian flooding from earlier this year would cost the re/insurance industry US $3.7 billion, which is slightly above the new figure from the ICA.
The ICA had cautioned on the impacts of inflation back in early May as a cause of rising losses from the 2022 floods, which PERILS had also echoed in its last update on the event.
That suggests the figure could rise higher and the ICA today said that 6% has been added to the total in just the last month.
It makes this year’s flood the second costliest extreme weather event in Australia’s history, the ICA explained.
It now passes 1974’s Cyclone Tracy and sits only behind 1999’s Sydney Hailstorm, which caused insured losses of $5.57 billion (normalised to 2017 values).
Over $2 billion of insurance claims have already been paid out, the ICA said, meaning in dollar terms around 40 per cent of the value of all claims made has been paid to customers.
Out of 230,000 claims from the flood event, 36 per cent are now finalised and closed.
The average claims cost is $22,000, with personal claims averaging $17,000 and commercial claims averaging $71,000, the ICA said.
While the number and value of claims is roughly evenly split between New South Wales and Queensland.
ICA CEO Andrew Hall commented, “The February and March East Coast Flood is continuing to break near 50-year records, demonstrating just how devasting this catastrophe was for so many communities.
“Insurers continue to employ more people and contractors to resolve claims for impacted customers, however delays are being experienced because of a shortage of experts needed to make assessments and significant constraints on builders and building materials.”