Property market loss from Australia’s January hailstorms A$670m: PERILS

The property insurance market loss from the severe hailstorms that struck the southeastern region of Australia in January has been preliminarily estimated at A$670 million by PERILS AG.

The Zurich based, industry backed estimator of catastrophe insurance and reinsurance market losses only includes property insurance related losses, so does not report on motor or other lines of business.

The latest figure from the Insurance Council of Australia (ICA) is for an estimate of an insurance and reinsurance industry loss of around A$805 million, including the motor claims, as we reported earlier this week.

The ICA said that the number of claims filed after these hail storms had reached over 87,500, more than 60,000 of which come from the auto line of business.

PERILS estimate of A$670 million is based on losses suffered from 19th to 21st January 2020 and covers storms that struck the Australian states of Victoria, New South Wales, Queensland and the Australian Capital Territory.

The company said that the January 2020 hail storms will likely rank as the fourth largest hail event of the past 20 years in Australia, surpassed by the Sydney Hailstorm of April 1999, the Brisbane Hailstorm of November 2014, and the Sydney Hailstorm of December 2018.

Darryl Pidcock, Head of PERILS Asia-Pacific, commented on the estimate, “Australia has already faced a very challenging summer especially given the impact of the bushfires on many local communities. The hailstorms that occurred in January are particularly unusual given that they affected three different states and the Australian Capital Territory over a three-day period. This is the second hailstorm event to be captured since PERILS entered the Australian market and provides another example of the value PERILS can bring to the market. We are very grateful for the support of our insurance partners who, whilst facing a demanding summer period, continue to contribute their loss data.”

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

Insurer Suncorp also recently said 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.

Some of the largest insurers in Australia will continue to share losses from recent catastrophe events, including this severe hail storm, with global players through their quota share reinsurance arrangements as well.

Losses from this hailstorm event will increase further, as the number of claims continues to rise and costs grow as they are settled. It’s likely PERILS will increase its estimate when it reports on this event again in April.