Insurance industry losses from severe weather events deemed catastrophes in Australia continue to rise, with a fifth event for 2015 being added thanks to another severe east coast storm that impacted Queensland and New South Wales.
The Insurance Council of Australia has declared the latest storm that occurred between April 30th and May 3rd a catastrophe event, and said that as of today insurers have received around 7,500 claims with an estimated insured loss of AUD$26m.
ICA CEO Rob Whelan commented; “East coast low-pressure systems can cause widespread damage, just like the system that caused havoc in NSW less than three weeks ago. This latest low has affected widespread areas of south-east Queensland and northern NSW.”
And suggesting that the loss estimate will rise further, Whelan explained that there are more claims to come; “The flow of claims was initially slow over the weekend, but large numbers of claims were lodged on Sunday. Insurers expect many more will be lodged this week and are standing by to assist their customers.”
The New South Wales east coast low pressure system that affected the region earlier in April has seen a further creep in its industry loss estimate, with the ICA reporting AUD$301m of losses from 68,243 filed claims.
Another catastrophe event, the Sydney hail storm that struck on Anzac Day, now has a claims tally of 19,000 and an insurance industry loss estimate of AUD$125m.
The other two 2015 catastrophes that the ICA has declared are Tropical Cyclone Marcia, with a loss estimate of $446m and South Australian bushfires from January with a loss estimate of $36.6m.
The total insured loss estimate for cat events in Australia in 2015 is AUD$934.6m to-date and certainly has further to run.
In fact, insurer IAG said that it believed it would face AUD$250m in losses from the first NSW storm and another AUD$50m for the Sydney hailstorm. Meanwhile Suncorp said that it expects to pay out AUD$135m net of reinsurance for the New South Wales low pressure storm system, with another AUD$50m-70m, again net of reinsurance, for the Sydney hail event.
Both of these insurers have revealed a hit to their reinsurance programmes, with IAG saying it would burn through one layer thanks to catastrophe losses and that its aggregate programme now sits exposed to future losses suffered.
That suggests a growing hit to international reinsurance firms, as well as potentially to any ILS fund managers that have participated in these reinsurance programmes on a collateralized basis.