Insurance and reinsurance market losses from a severe east coast low that struck Australia at the beginning of February are estimated to be A$794 million, according to PERILS AG.
As we explained yesterday, the Insurance Council of Australia (ICA) pegged the losses from this latest catastrophe to beset Australia during its summer at A$677 million, based on claims as of March 23rd.
The Australian East Coast Low event struck the country from 5th to 13th February 2020, mainly impacting the Australian east coast states of New South Wales and Queensland.
Based on property market loss data collected from insurers, PERILS said the insured loss from the storm, rainfall and flooding event is preliminarily estimated to be A$794 million.
This catastrophe loss came on the heels of the the insurance and reinsurance market loss from bushfires that burnt across Australia in late 2019 into early 2020 which has now passed A$2 billion and the industry loss from severe hailstorms that struck the southeastern region of Australia in January which has reached A$1.2 billion.
In total, the ICA estimates summer catastrophe insurer losses as reaching more than A$4.6 billion, with some sources saying this will now be above A$5 billion.
PERILS explained that the February 2020 east coast low was “A long low-pressure trough extending inland along the Australian east coast. This low-pressure trough drew in moisture from the Tasman Sea which was warmer than usual, particularly off Sydney. The result was very intense rainfall from early to mid- February 2020 leading to flash and river flooding. The rainfall was accompanied by strong winds on 9 February as well as storm surge and high waves. In combination, these weather features caused widespread damage along the coastal areas of South East Queensland and New South Wales.”
The industry loss from the event is the third largest seen for an east coast low storm system in Australia, PERILS explained.
It is surpassed only by an East Coast Low of June 2007 (estimated at A$2.4bn as-if-today) and April 2015 (estimated at A$1.2bn as-if-today).
Darryl Pidcock, Head of PERILS Asia-Pacific, commented: “The summer of Cat events continued with the East Coast Low event following the Australian bushfires and hailstorms. With a combination of heavy rainfall, strong wind gusts and storm surge, considerable insurance losses were experienced. Whilst the East Coast Low caused significant property damage, the heavy rainfall refilled water catchment areas as well as bringing relief to many bushfire and drought-affected rural areas.”
Recent catastrophes in Australia have impacted some insurance-linked securities (ILS) positions, with ILS fund manager Twelve Capital saying one private ILS contract it had underwritten was exposed to potential losses from the bushfires, while retrocession manager Markel CATCo said the Australian bushfire disaster has caused some capital to be trapped within its listed retrocessional reinsurance investment fund strategy.