Industry backed catastrophe loss data aggregator and estimator PERILS AG is investigating three recent events around the globe, to establish whether they will meet the various thresholds for each region and peril to warrant regular reporting.
Severe weather has led to a number of catastrophe events in countries where PERILS tracks and reports on catastrophe insurance loss data, leading to the need to investigate.
The first event is the recent severe flooding that struck the Italian city of Venice, which found itself underwater a number of times in the last month.
High tides, combined with wind conditions that blew the tides onshore and also the influence of rising sea levels and sinking land mass, are all conspiring to plague the historic city of Venice with flooding and this year the economic costs are thought to run into the billions of Euros.
The mayor of Venice recently said that an early estimate put the economic impact of flood damage at around EUR 1 billion (wider weather events in Italy are expected to add to this, taking the total to roughly EUR 1.6 billion), a figure which is likely to rise once interruption related costs are factored in.
The insurance market impact is much harder to determine, given flood insurance limits and penetration rates are less clear in Italy than some other European countries.
PERILS threshold for reporting on an Italian flood loss event is at EUR 200 million typically, so if the estimate of a billion Euros plus of economic losses holds true, there is a chance the insured property loss surpasses the threshold.
The next event is the Australian bush fires, which are an ongoing concern across the country. Here PERILS says it is investigating fires in New South Wales and Queensland, but as we explained this week the dangerous fire weather has spread to other states as well, raising the prospects of more wildfire activity in Australia over the coming days.
More than 500 properties have been reported as destroyed in the New South Wales and Queensland regions alone, with losses estimated at a preliminary AU $115 million, but that figure expected to rise significantly.
PERILS threshold for reporting on natural catastrophe events in Australia is AU 500 million, so there would be some way to go before the current bush fire outbreak results in a significant hit to insurance and reinsurance market for reporting to be warranted. However, if the fire weather continues to look dangerous there is every chance this could occur, especially with the area at risk widening.
Finally, PERILS is also looking at the UK flooding situation, which has seen a number of towns swamped in the last fortnight after heavy rain and storms struck.
An estimate over a week ago from accountancy PwC put the insured losses at up to UK £120 million (as reported by our sister publication Reinsurance News), but that figure will surely have risen as flooding continued in the last few days.
PERILS has a EUR 200 million threshold for reporting on UK flood loss events, so there is a good chance that the current flooding could end up surpassing that level of insurance industry loss and mean the firm begins to aggregate insurers claims data related to it.
While none of these events are going to drive significant impacts to the reinsurance market, there is a chance of some claims leakage through quota shares and the like.
With the fires and flooding likely to continue, it may be early days in the investigation process and it could take some time before any reports emerge, especially if the losses are ongoing.