Catastrophe loss aggregator PERILS has provided a new insurance industry loss estimate of AUD 6.292 billion (USD 4.329 billion) for the devastating Eastern Australia floods that occurred over February and March this year.
This update represents a significant 29% increase over the previous loss estimate of AUD 4.895 billion (USD 3.367 billion) that PERILS released three months after the flooding.
At the current level, it now represents the largest insured catastrophe loss ever experienced in Australia, according to PERILS.
Analysts explained that the updated figure is primarily composed of personal lines property losses which represent 62% of the total industry loss, while commercial lines property losses represent 28% and motor losses 10%.
Heavy rain in late February this year developed into one of Australia’s worst ever flood events, with severe flooding and property damage reported throughout several northern New South Wales regional towns and the surrounding areas of metropolitan Sydney.
“The insurance industry continues to deal with many challenges including completing claims assessments, shortages in building labour and supply disruptions driving up claims costs,” noted Darryl Pidcock, Head of PERILS Asia-Pacific. “It remains a very difficult time for policyholders recovering from the flood impacts as well as the insurance industry managing the sheer volume of claims.”
In line with PERILS’ standard reporting process, this third loss report provides a breakdown of property and motor losses by postcode (high-resolution CRESTA Zones), with the data further divided by residential and commercial lines, and loss amounts split into buildings, contents and business interruption losses where available.
“The observed loss development from AUD 4,895m in the second loss report to AUD 6,292m in the third is driven by two factors,” explained Lukas Wissler, Product Manager at PERILS.”
“Firstly, loss estimates collected from affected insurance companies during the interim three-month period increased. In addition, the resolution of the data was also higher with loss information available per postcode and line of business.”
A final updated estimate of the industry loss from the Eastern Australia floods will be made available by PERILS on 11 March 2023, one year after the event’s end date.