Insured losses for Australia’s Jan hailstorms rise almost 50% to A$1.2bn

The insurance and reinsurance industry bill after the severe hailstorms that hit the southeastern region of Australia in January have now risen by almost 50%, with the latest industry loss estimate now at A$1.2 billion (around US $700m).

It makes the hailstorms one of the most costly hail events in Australian history and a share of these losses are flowing to some reinsurance carriers and we understand a handful of ILS contracts as well.

The hailstorms were triggered by an outbreak of severe convective weather, thunderstorms, large hail and flooding, that struck across a swathe of southeastern Australia from January 18th to the 20th.

Large hail has been the main driver of insurance market loss and damages, with significant automobile impacts as well as property damage seen.

As of January 21st, the insurance industry loss from these hailstorms had already reached A$320 million, according to the Insurance Council of Australia (ICA).

A day later the figure jumped 27%, with the expected industry loss rising to A$407 million.

As of January 23rd, in a further rise of over 26%, the total estimated insurance industry loss reached A$514 million.

We then covered the hailstorm event again, after losses rose some 24% to reach A$638 million.

Finally, at the beginning of March we explained that the loss estimate from the ICA had risen again to A$805 million.

Now, as of March 23rd 2020, the industry loss estimate from these hailstorms has increased by almost 50% to reach A$1.2 billion.

In total the industry has now reported almost 108,000 claims as being filed following these hailstorms in Australia.

The hail storm losses also hit the reinsurance market, with Australian primary insurer IAG announcing that it would claim under its calendar year 2020 main catastrophe reinsurance program that provides it with per-occurrence protection and would cover the recent hailstorm events. IAG said its gross loss impact could even surpass A$250 million.

Insurer Suncorp also stated that an “unprecedented” start to the season for catastrophe losses (including this hail event) meant it expects to make recoveries across its reinsurance program, including its main program, drop-downs and aggregate reinsurance including perhaps its stop-loss.

A number of the largest insurers in Australia also share their losses from recent catastrophe events, including this severe hail storm, with global players through their quota share reinsurance arrangements.

PERILS AG estimated the property market loss from these hailstorms at A$670 million in early March. So with this latest increase in the ICA’s number, it suggests PERILS estimate will likely rise again when it next reports on the event.