As expected the insurance industry loss estimate for the east coast low pressure storm that has affected New South Wales, Australia, particularly the Sydney area, has risen overnight, from the AUD$129m reported yesterday to now stand at AUD$161m.
Update: The industry loss estimate rose to AUD$295m.
Another 4,750 claims have been reported, taking the total to 24,250. However the Insurance Council of Australia reports that assessors are only now being sent into the most storm-affected areas, which would suggest that claims will continue to rise in both number and size.
ICA CEO Rob Whelan commented; “Most of the claims received are for home and contents, mainly for light damage caused by rain and wind, with a small number of motor vehicle and commercial claims. These are early figures for this catastrophe, and insurers are standing by for many more claims to be lodged over the next few days.”
Insurance Australia Group (IAG) said today that it has received 10,000 claims so far, but added that it is too early to forecast the companies loss from the Sydney area storm, with the majority from property damage caused by strong winds and heavy rain.
“While it is too early to reach an accurate estimate of the potential financial impact of this event, the company will provide an update as soon as it is in a position to do so,” IAG explained.
IAG has $150m of reinsurance cover that kicks in above its retention.
Insurer Suncorp said it is responding to over 7.500 claims related to the New South Wales storms. Suncorp said it is too early to provide an estimate, but explained that the maximum impact to the firm would be AUD$135m as its reinsurance programme would kick in afterwards.
We understand that ILS funds that provide collateralized reinsurance coverage to Australian insurers are waiting for further updates before making any decisions whether to reserve or not. One ILS manager we spoke with said that at the level his funds provide protection on Australian property catastrophe reinsurance layers he is not concerned, as the industry loss would need to rise significantly to trouble them.
However some reports are likening this event to storms that have caused damage levels that, on today’s valuations, might result in an eventual insured loss nearer to AUD$1 billion. If that turns out to be the case some impact to reinsurance firms and possible ILS funds is likely.