PERILS puts Townsville flood property only loss at A$957m

The Townsville area flooding in the Queensland region of Australia is estimated to have caused an insurance and reinsurance market loss of A$957 million (US $680m) just from damage to properties and not including motor or other lines of business.

PERILS AG, the catastrophe loss data aggregator, said that its estimate for the loss from the floods that affected Queensland, Australia, in particular the area around the city of Townsville, from 26th January 10th February 2019, is based on data collected from insurers.

PERILS loss numbers only include the property line of business, so not losses to motor or automotive lines, which makes the number likely considerably lower than the figures that will worry some reinsurance capacity providers that have exposure to this event.

These Townsville floods resulted from a a slow-moving monsoon system which drove elevated 10-day rainfall accumulations of more than 2000mm in some areas of Queensland. For the city of Townsville, the accumulated totals were the highest since records began in 1888.

Flooding from the Ross and Bohle rivers caused severe damage to thousands of homes, businesses and public infrastructure in the Townsville area. Flooding was further exacerbated by the opening of spillway gates for the Ross River Dam, after the reservoir’s capacity exceeded 200%.

The devastation was much broader than just the property damage though, as crop and agricultural losses have also been significant from this flooding episode and the automotive lines damage has also been said to have been considerable.

Previously, the Insurance Council of Australia (ICA) said it had recorded more than 22,200 insurance claims from the flooding and said that payouts from insurance and reinsurance sources would surpass A$893 million.

PERILS figure of A$957 million is therefore the highest industry loss estimate seen so far for these floods, despite excluding a considerable amount of insured loss related damages. This suggests the true toll for the insurance and reinsurance market will be much higher.

Darryl Pidcock, Head of PERILS Asia-Pacific, commented on the loss event, “Given the record-breaking amount of rain which fell over North Queensland from 26 January to 10 February, it is no surprise that extensive flooding occurred from overflowing rivers and surface water run-off. After 1998, 1953 and 1946, this is the fourth time in the last 100 years that the Townsville region has been affected by severe floods. This clearly underpins the need for reliable flood insurance data which PERILS strives to provide, helping to further improve the industry’s understanding of Australian flood risk and ultimately making it easier to insure.”

We’ve already reported that Suncorp has seen its claims from the Townsville flooding trigger its aggregate reinsurance protection, as we reported recently.

Our sister publication Reinsurance News also reported that Brisbane-based insurer RACQ said its losses from the floods would likely be between $30 million and $50 million, but should be limited to just $20 million after its reinsurance protection kicks in.

Other insurers with exposure to these floods include IAG, QBE, Youi, Allianz and AIG, which are all likely to experience some losses. Although for most of these insurers their retentions are high and the losses would need to either escalate or, like Suncorp, trigger an aggregate reinsurance layer they have in place. Auto lines exposure may be seen across some of this group.