The estimate for insurance and reinsurance market losses from the severe east coast low pressure storm that hit Australia at the beginning of February 2020, has been finalised with a rise of 3% at A$989 million by PERILS AG.
PERILS first estimate for this storm at the end of March 2020 was for an industry loss from the east coast low pressure storms and flooding of A$794 million.
The Insurance Council of Australia had soon after estimated a total of A$936 million.
PERILS then updated its insurance and reinsurance industry loss estimate for the storms to A$958 million in August.
Now, the estimate has been lifted another 3% by PERILS and finalised at A$989 million.
The Australian East Coast Low storm of February 2020 struck the country between 5th and 13th of that month, mainly impacting the Australian east coast states of New South Wales and Queensland.
Storm damage, rainfall and flooding were the major drivers of insurance market losses and this added to Australian insurers catastrophe tolls from last years season and is thought to have driven some reinsurance recoveries as a result.
It is the third largest insurance market loss seen for an east coast low storm system in Australia, surpassed only by an East Coast Low of June 2007 (estimated at A$2.4bn as-if-today) and April 2015 (estimated at A$1.2bn as-if-today), according to PERILS.
PERILS industry loss estimate includes property and motor losses.
Damage in New South Wales accounted for 88% of the industry loss from the east coast low, while South East Queensland was 11% of the industry loss.
Property damage made up the significant majority of losses, with 94% attributable to this line of business, while motor losses only represented 6% of the total.
Darryl Pidcock, Head of PERILS Asia-Pacific, stated, “Today’s release constitutes the first complete schedule of reports produced by PERILS for an Australian East Coast Low event and this final detailed industry loss footprint will help further enhance the insurance industry’s understanding of such losses. During the current summer, Australia’s east coast has continued to experience considerable rainfall and storms due primarily to the influence of La Niña. This report is a reminder that in addition to bushfires, hailstorms and tropical cyclones, the east coast is also exposed to large-scale extratropical cyclone systems which can have a considerable impact on the insurance industry.”