The insurance and reinsurance industry loss estimate for the outbreak of severe flooding that affected parts of southeastern Australia during the month of October 2022, has been raised by 6% to AU $840 million, by catastrophe data aggregator PERILS.
PERILS had estimated the industry loss from this Australian flood event at roughly AU $791 million in early December 2022.
The estimates cover flooding that primarily affected the states of New South Wales, Victoria and Tasmania between 12 to 28 October 2022.
PERILS’ insured market loss estimate of AU $840 million is based on data collected from the Australian insurance market, and covers the property and motor hull lines of business.
As we previously explained, the Insurance Council of Australia (ICA) had declared this October flooding incident an insurance catastrophe, but S&P had said it did not envisage much in the way of reinsurance recoveries being made by affected insurers.
But, with Australian flood insured losses having reached more than AU $6 billion so far in 2022 alone, it is possible some reinsurance treaties could respond to the latest event and quota shares will undoubtedly have seen losses shared with reinsurance partners.
The flooding was caused by a series of low-pressure systems that brought heavy rain to inland Southeast Australia.
Prolonged and at times intense rainfall was experienced over the southern Murray–Darling Basin and Tasmania, with some rainfall records falling as a result and leading to extensive riverine and pluvial flooding in the inland regions of New South Wales, Victoria and Tasmania.
Darryl Pidcock, Head of PERILS Asia-Pacific, said, “The weather in Australia in 2022 was dominated by La Niña conditions which resulted in above-average rainfall in many regions of northern and eastern Australia. Both, the record floods of late February / early March and the floods of October 2022 are linked to this large-scale weather pattern, which is now in its third consecutive summer but anticipated to weaken in the coming months.
“While the February-March floods impacted densely populated coastal regions, the October floods mostly affected inland rural areas and losses to the insurance industry were therefore significantly lower. For the affected communities they were still a heavy blow.”
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