The insurance and perhaps reinsurance industry loss estimate for tropical Cyclone Seroja, which impacted Western Australia earlier this year, has been lowered by roughly 9% to A$394 million by PERILS.
PERILS had initially estimated that cyclone Seroja’s impacts in Western Australia would cause a A$434 million industry loss for the insurance and reinsurance market.
But at the second update to the figure, it seems the industry may have reserved too high again for an Australian catastrophe event, as was seen recently with the March 2021 floods.
Tropical cyclone Seroja struck Western Australia between 11th and 12th April 2021, coming ashore just south of the town of Kalbarri at 8.00pm local time on the 11th.
Cyclone Seroja caused strong winds to impact an area of approximately 800km of the Mid-West Australia region coastline, PERILS said, explaining that wind gusts extended further inland as cyclone Seroja continued a south-south-easterly track into the morning of 12th April and the highest gust speeds were recorded in the town of Kalbarri which reported wind speeds of 170km/h, while other locations in the region experienced gusts above 125km/h.
PERILS noted at the time that cyclone Seroja was a comparably “dry” event with moderate rainfall, meaning that most of the damage from came from the storms strong winds.
The updated industry loss estimate of A$394 million is based on detailed loss data collected from the majority of the Australian insurance market, Perils explained.
Property losses made up the majority of the loss, at 98.6% of the total industry loss, while motor losses represent 1.4%.
There won’t be another update to this number, as the cyclone loss event falls well-below Perils A$500 million threshold for Australian catastrophe events, the company said.
Darryl Pidcock, Head of PERILS Asia-Pacific, commented, “As a recent research project by Geoscience Australia and the Department of Fire and Emergency Services showed, the loss impact of Cyclone Seroja would have been far greater had the storm crossed further south and made a direct hit on the town of Geraldton. As such Seroja serves as a warning that devastating tropical cyclones can happen in the northwest of the state of Western Australia.”
PERILS loss estimate compares to a claims incurred figure of A$303 million from the Insurance Council of Australia, which is from 6,900 claims, some 3,100 of which remain open, leaving plenty of room for the eventual industry loss to rise to PERILS estimate and perhaps above.