The industry loss to insurance and reinsurance markets from March’s severe flooding in New South Wales and Queensland, Australia has been initially estimated at A$1.055 billion (around US $825m) by PERILS.
The flooding hit the eastern region of Australia from 18th to 24th March 2021 and quickly a number of insurers said the event could cause them to tap their reinsurance protection.
PERILS estimate for just over A$1 billion of industry losses is based on claims for the property and motor hull lines of business.
Major river and surface water flooding occurred during the event, as a blocking high pressure system in the Tasman Sea interacted with a low-pressure system off north-west Australia that fed moist tropical air into eastern Australia.
The Mid North Coast, and the Hunter and Greater Sydney regions were the worst affected, while parts of south-east Queensland and eastern Victoria were also impacted by storm and flood damage.
Across a 7-day period, the New South Wales coastal region experienced the highest recorded rainfall since national records began in 1900, PERILS explained.
Some locations along the mid-north coast of New South Wales recording as much as 600-800mm of rain.
Damage to private property and businesses was largely covered by insurance, while losses to public infrastructure, crops and livestock remained largely uninsured, PERILS said.
Darryl Pidcock, Head of PERILS Asia-Pacific, stated, “During the week ending 24 March 2021, the East Coast of Australia experienced extreme rainfall over both a wide geographic area and an extended period. The resulting damage from storm drain water and river flooding was considerable, especially for New South Wales, where the event represents the largest industry flood loss on record. While damage to private property was largely insured, there were cases where policyholders decided to opt out of flood cover reminding us of the challenges the industry still faces in offering sustainable and affordable flood risk protection in Australia.”