The first catastrophe of the 2020-21 season has been declared in Australia by its Insurance Council, after large hail of up to tennis ball size hit south-east Queensland damaging cars and homes.
An influx of claims is expected once as residents and businesses inspect the damage and lodge impacts with their insurance providers.
An initial catastrophe insured loss estimate of AU $60 million was given by the Insurance Council of Australia (ICA) on Sunday November 1st, but this was quickly raised to over AU $110 million as of Monday November 2nd.
Being the first natural catastrophe declaration of the accepted season in Australia the chances of reinsurance impacts are slimmer than with events later in the summer months, as aggregate reinsurance contracts have picked up a lot of the claims from major insurers in recent years.
The ICA said that by Monday November 2nd insurers had received over 8,500 claims, with insured losses estimated at more than $110 million.
Around 60% of the claims are for automotive losses, with another 40% for homes, including roof, skylight and solar panel damage, as well as interior damage to what the ICA said was “a significant proportion of homes.”
Commercial property claims are expected to flow in the week as businesses returned on Monday and inspected the damage.
ICA CEO Andrew Hall explained that the hardest-hit areas included Springfield, Rosewood, Greenbank and Boronia Heights, all suburbs of Brisbane.
“The Catastrophe declaration means insurers will prioritise claims from these hail-affected areas and will direct urgent attention to those most in need of assistance,” he explained.
Hall said that, “insurers were expecting an influx of claims tomorrow as more householders and businesses inspected the damage and contacted their insurers or insurance brokers.”
Last seasons natural disasters cost insurers some AU $5.9 billion, as claims from bushfires, storms, hailstorms and floods struck the industry.
Reinsurance providers supported Australian primary carriers claims payment, with some losses seen in the insurance-linked securities (ILS) fund market for certain reinsurance contracts.
The same South-east Queensland region has experienced a number of large hailstorm losses in recent years, notably the 2014 Brisbane hailstorm which drove a $1.5 billion market loss, and the hailstorm that hit the region last November, which resulted in losses of $504 million. The Rockhampton hailstorm in April caused another $503 million in insured damage.