Australian east coast low industry loss estimated at A$794m by PERILS

Share

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.

sydney-flooding

Sydney flooding image from ABC News’ Oscar Coleman.

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.

———————————————————————
Artemis Live - ILS and reinsurance video interviews and podcastView all of our Artemis Live video interviews and subscribe to our podcast.

All of our Artemis Live insurance-linked securities (ILS), catastrophe bonds and reinsurance video content and video interviews can be accessed online.

Our Artemis Live podcast can be subscribed to using the typical podcast services providers, including Apple, Google, Spotify and more.

Print Friendly, PDF & Email

Artemis Newsletters and Email Alerts

Receive a regular weekly email newsletter update containing all the top news stories, deals and event information

  • This field is for validation purposes and should be left unchanged.

Receive alert notifications by email for every article from Artemis as it gets published.

Read previous post:
SCOR delays new Atlas Capital cat bond, cites Covid-19 disruption

France headquartered global reinsurance company SCOR has suspended the marketing of its new catastrophe bond, Atlas Capital Reinsurance 2020 DAC...

Close