bushfire

The insurance and reinsurance market loss from claims caused by the bushfires that burnt across Australia in late 2019 into early 2020 has risen another 6% and passed A$2 billion for the first time.

Insurance and reinsurance industry losses from the recent Australian bushfires across an hours clause appropriate seven consecutive day period are estimated at nearly A$1.6 billion (almost US $1.1bn) by PERILS AG.

The latest data on claims and expected industry losses from the ongoing bushfires in Australia shows that the insurance and reinsurance market loss has risen another 15%, to reach A$1.9 billion (around US $1.3bn).

Australian primary insurance group IAG has highlighted “significant reinsurance recoveries” made under its program in 2019, including around $280 million from its aggregate tower, with more to come as costs from the recent heavy rain event looks set to be capped by its reinsurance as well.

Australian primary insurer Suncorp has revealed that around half of its aggregate reinsurance protection has been used up thanks to heavy losses from bush fires, hail and storms in recent weeks.

Insurers in Australia are now facing almost A$2.6 billion of catastrophe losses just from the last five months, with the latest being a spate of extreme rainfall and flooding in recent days that increases the chances of more losses leaking into the reinsurance market from the country.

Australian primary insurance giant Suncorp has referred to an “unprecedented” start to the season for catastrophe losses this morning, saying that it now expects to make recoveries across its reinsurance program, including its main program, drop-downs and aggregate reinsurance including perhaps its stop-loss.

The quantum of an eventual reinsurance market loss from the Australian bushfire disaster remains highly uncertain, as the specific terms and conditions defining an event on individual reinsurance programs will matter, according to A.M. Best.

Australian primary insurance giant IAG is set to make a claim under its calendar year 2020 main catastrophe reinsurance program that provides it with per-occurrence protection for the recent hailstorm events, signalling that the gross loss impact to this one insurer will surpass A$250 million.

The ongoing outbreak of bushfires in Australia are now said to be the costliest example from an insurance and reinsurance market loss perspective, as the latest data shows losses reached A$1.65 billion (US $1.13bn).