While the ongoing bushfire crisis in Australia has dropped out of the headlines a little in recent days, thanks to rainfall and cooler temperatures, parts of the country have faced fresh catastrophe events as significant severe convective storms and very large hail struck a number of major urban areas over the last few days.
A large area of southeastern Australia has been under warnings for severe convective storms, which continue at this time in the Sydney to Brisbane region.
Yesterday and earlier today both Melbourne and Canberra were hammered by severe storms, with large hail seemingly the main source of damage as giant hail stones of up to 5cm (2 inches) or more in diameter hit the areas.
Damaging thunderstorms were seen across a swathe of the southeastern coastal regions of Australia and hail damage is expected to be severe, particularly in Canberra where many vehicles have been hit and buildings impacted.
Flooding has also been seen due to the heavy rainfall and large hail, with a months worth of rainfall experienced in just a day or so in some areas.
With the severe thunder and hail storms continuing and affecting parts of suburban Sydney, while expected to travel up the coast through other urban areas, the expectation is that further damage will be experienced.
It’s far too early to speculate over the impacts of these severe weather outbreaks, but on top of the fires they will further pressure insurers and perhaps lead to more claims leaking into the reinsurance market.
Insurers are tapping their aggregate reinsurance protection for bushfire losses already, so should the impacts of these severe storms and large hail surpass their set per-event retention levels it could result in further reinsurance recoveries.
In addition, the large insurers in Australia have been sharing some of their losses through quota share reinsurance arrangements, which could also continue should the hail and storm impacts be significant.
Media reports suggest many vehicles and properties have been damaged by the large hail, but it could take some time before the impacts of the ongoing severe storm event are fully understood.
Meanwhile, more than 80 bushfires continue to burn in Australia and despite the weather helping fire fighters to gain more control of the blazes, the chances of further fire damage continue to be a threat.
The latest estimate of industry losses from the bushfires, as of January 17th, is for A$1.41 billion (around US $970m) of industry losses from 16,380 claims, according to the Insurance Council of Australia (ICA).