Insurance and reinsurance industry losses from the recent Australian bushfires across an hours clause appropriate seven consecutive day period are estimated at nearly A$1.6 billion (almost US $1.1bn) by PERILS AG.
The latest information from the Insurance Council of Australia (ICA) puts the industry losses from the bushfires at A$1.9 billion (around US $1.3bn), as we explained on Friday, but that is for losses from November 8th 2019 to-date.
Zurich based industry backed catastrophe loss data aggregator PERILS AG has opted to focus its first estimate on a seven day period that fits better with the 168 hours clause that many Australian insurers use.
As a result, the company says that its initial insured property loss estimate for the Australian bushfires is close to A$1.6 billion, based on information collected from insurance companies.
PERILS based this on the peak industry event loss for a seven consecutive day period caused by the bushfires in Australia that occurred at the end of 2019 and beginning of 2020.
In this case the event definition follows the 168 hours clause, which PERILS notes is predominantly used in the Australian insurance and reinsurance market to define a bushfire “event”.
In this case the peak seven-day loss period differs among insurers, but PERILS said that it generally lies between 20th Dec 2019 and 6th January 2020 and for most it falls between 30th Dec 2019 and 5th January 2020.
PERILS initial estimate for close to a A$1.6 billion industry loss is only focused on the property line of business.
At the A$1.9 billion the ICA has reported, losses to the insurance and reinsurance industry are the highest ever for bushfires, PERILS noted.
The firms estimate for the peak loss period were largely due to bushfires in New South Wales, Victoria and South Australia, and PERILS noted that this surpasses the industry loss caused by the Black Saturday Bushfires of February 2009.
Darryl Pidcock, Head of PERILS Asia-Pacific, further explained, “The bushfire season has had a devastating impact on many local communities, which may take years to recover. Our sincere sympathies go out to those who have also lost loved ones, including the firefighters who have made considerable sacrifices. While the quantum of insurance losses will cover only a portion of the overall economic cost of the disaster, it still plays a very important function in enabling individuals, businesses and communities to rebuild. PERILS’ mission by making available insurance industry loss information from this event is to help improve the understanding of bushfire insurance risk going forward and to facilitate the availability of capacity for future bushfire events.”
Alongside other catastrophe events, including hail storms this year, as well as severe storms and flooding, Australia’s insurers have faced an expensive few months and their reinsurance carriers are increasingly being called on for support in paying the claims burden from the bushfires and other events.