The Insurance Council of Australia has confirmed that severe storms that struck parts of the country in April and May have caused over AUD$1.55 billion of insurance industry losses. These storm losses have caused at least two ILS funds to reserve for potential reinsurance claims.
Australia saw a number of severe low pressure systems come onshore during April and May, causing high winds, torrential rain and hail storms that caused both residential and commercial property damages. The claims have caused large Australian primary insurers to call on reinsurance protection, which has also impacted some ILS fund managers.
The first event, the east coast low pressure storm that struck New South Wales in April and affected the metropolitan Sydney area, has now resulted in 119,935 claim reports. Insurance losses for this event total $801.7m to date, with $629.6m for domestic claims and $172.1m commercial.
The second event, a hailstorm that struck Sydney on Anzac Day, now has insured losses of $389.8m. The bulk of the losses from this hail event, totaling $302.4m, are from commercial policies, mainly for damage to industrial properties.
Finally, storms that struck South-East Queensland and Northern NSW between April 30th and May 4th caused an insured loss of $360.2m, $289.8m for domestic claims and $70.2m for commercial claims, from 27,825 claims.
The ICA said that insurers and brokers continue to handle fresh claims from these events, suggesting that some upwards creep in the overall insurance industry loss is likely.
Large Australian primary insurers are calling on their reinsurance protection as a result of these storms, having now suffered catastrophe losses of $3.45 billion since November 2014.
Tropical Cyclone Marcia (February 2015) resulted in a loss of $518m (commercial $190.3m, domestic $327.7m). South Australian bushfires (January 2015) caused $36.6m in losses (commercial $12m, domestic $24.6m). And the Brisbane hailstorm (November 2014) losses now total $1.35 billion (commercial $513.3m, domestic $837.5m).
Reinsurers have called on aggregate, or sideways reinsurance covers to help pay the claims from these events. It is these layers that are thought to have caused at least two ILS funds to reserve for a potential hit on specific collateralized reinsurance contracts.
Any loss to ILS funds is expected to be minimal though, as these positions are thought to be small in the scheme of a portfolio.