The estimate of insurance and reinsurance market losses from a severe east coast low pressure storm that struck Australia at the beginning of February, has risen some 21% at the second reporting to A$958 million, according to PERILS AG.
PERILS latest estimate, which is its first update since it estimated the industry loss from the east coast low pressure storms and flooding to be A$794 million at the end of March, compares to one of A$936 million from the Insurance Council of Australia.
The Insurance Council’s estimate is based on 99,698 claims filed as of July 24th.
The Australian East Coast Low storm event struck the country between 5th and 13th February 2020, mainly impacting the Australian east coast states of New South Wales and Queensland.
Storm damage, rainfall and flooding were the major drivers of insurance market losses and this added to Australian insurers catastrophe tolls and did drive some reinsurance recoveries as a result.
It remains the third largest insurance market loss seen for an east coast low storm system in Australia, 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), according to PERILS.
The estimate from PERILS includes property and motor losses, recall the company included motor losses in its estimates more recently for the Australian market.
Widespread damage was seen along coastal areas of New South Wales (88% of the industry loss) and South East Queensland (11% of the industry loss), while property damage made up the majority of losses, with 93% attributable to this line of business, and motor only 7% of the total insurance industry loss.
Darryl Pidcock, Head of PERILS Asia-Pacific, commented: “This release is of particular market relevance as it is the first time a detailed industry loss footprint has been made available for an Australian East Coast Low event. The event was part of a very active Australian summer season which included the Australian Bushfire and Hailstorm events.”
Catastrophes in Australia from the last summer 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.