Insurance and reinsurance market losses from severe storms and flooding that impacted the eastern coastal region of Australia at the beginning of February are now estimated to have reached A$677 million by the Insurance Council of Australia (ICA).
The storms and torrential rains began around February 4th and ran through to the 10th, with the severe storms bringing torrential rainfall to the Australian east coast, resulting in significant flooding.
The rains were called the heaviest to hit the Sydney area and surroundings in 30 years, as a huge 391.6mm of rainfall was recorded in just four days in Sydney, more than three times the average rainfall for the entire month of February.
The Insurance Council of Australia (ICA) reported on Feb 10th that there had been more than 10,000 claims filed from the storms and rain, running to a $45 million loss at the time.
As of March 23rd, the expected insurance and reinsurance market loss had risen significantly to A$677 million, making this event just the latest in a string of major summer catastrophes to strike Australia in recent months.
The majority of the claims filed are for property damage caused by storm and rain driven flooding, as well as strong winds.
The ICA estimates the split of claims from this storm and flooding events as 67% building, 27% contents, 6% motor.
Australia’s summer of catastrophe losses has now mounted to a significant volume of claims and losses, with reinsurance markets paying their share.
As we explained last week, the insurance and reinsurance market loss from the bushfires that burnt across Australia in late 2019 into early 2020 has now passed A$2 billion and the industry loss from severe hailstorms that struck the southeastern region of Australia in January has reached A$1.2 billion.
Some of Australia’s largest insurers are already sharing the claims burden with their reinsurance capital providers.
Recent catastrophes have also impacted some insurance-linked securities (ILS) positions, with ILS fund manager Twelve Capital saying one private ILS contract it had underwritten was exposed to potential losses from the bushfires, while retrocession manager Markel CATCo said the Australian bushfire disaster has caused some capital to be trapped within its listed retrocessional reinsurance investment fund strategy.