Yesterday we covered the outbreak of severe convective weather, thunderstorms, large hail and flooding across a swathe of southeast Australia and already the industry insured losses from these storms has been estimated at A$320 million.
The Insurance Council of Australia (ICA) responded quickly with data collection from these storms having declared a catastrophe event.
In a sign of just how quickly losses could rise for this storm even, the organisation quickly reported 19,500 claims filed and an estimated insurance market loss of A$95 million.
Just four hours later the ICA provided an update, lifting the number of insurance claims filed to 29,000 and the insurance and perhaps reinsurance market loss to A$320 million (around US$220m).
So far, 56% of the insurance claims filed from the major hail storm event are in the Australian Capital Territory, 34% in Victoria and 10% in New South Wales.
The overall claims figure is expected to soar, as it is only a day since the storms were continuing to impact the region.
The ICA said that “thousands more claims are expected” from the severe weather event, with hail seemingly the driver of a significant number of the claims.
As ever with a large hail event, it’s likely that claims are emanating from auto and property lines of business.
Both Melbourne and Canberra were hammered by the hail storms, as well as parts of Sydney and up the coast towards Brisbane.
Large hail appears to have been the main source of damage, as giant hail stones of up to 5cm (2 inches) or more in diameter hit the areas.
Damaging thunderstorms were seen across a wide swathe of the southeastern coastal region of Australia, with hail damage expected to be severe, particularly in Canberra where many vehicles have been hit and buildings impacted.
Flooding was also a factor, due to heavy rainfall, with a months worth of rainfall experienced in just a day or so in some areas.
It remains very early to speculate over the potential industry impacts of these convective storms and large hail. But the losses will further pressure insurers after the ongoing bushfires and could lead to more leaking of claims into the global reinsurance market.
Insurers are already tapping their aggregate reinsurance protection for the bushfire losses. The impacts of these severe storms and large hail could now surpass their set per-event retention levels, driving further reinsurance recoveries.
In addition, large insurers in Australia have been sharing some of their recent catastrophe losses through quota share reinsurance arrangements, which is likely to continue as these hail and storm impact look set to be significant.