Reinsurance News

Australia floods again, with Sydney area badly hit

3rd July 2022 - Author: Steve Evans

Australia has been hit by more significant rainfall and strong winds as an East coast low batters the country, with parts of Sydney particularly badly hit as 350 mm of rainfall has been recorded and numerous rivers reach flood stage.

australia-floodingThousands of households have been told to evacuate due to flood warnings and an expectation of more rains to come.

Southwest and northwest Sydney have seen properties flooded, while the Hawkesbury-Nepean Valley area is being warned that the worst flooding may still be to come.

This July flooding in Australia comes as parts of the eastern and southeast coast of the country continue to recover from flooding earlier this year.

This year’s East Coast Flood from February and March has been deemed the costliest flood in Australian history and the third most costly natural catastrophe event, by the Insurance Council.

Stratumn, by SIA Partners

The latest data from the Insurance Council of Australia showed that flooding in South-East Queensland and Northern New South Wales in late February and early March caused $4.8 billion in insured damages.

This latest flood event has resulted in more than 18 evacuation orders in the Sydney area alone, while Australia’s Bureau of Meteorology (BOM) has flood warnings in effect in other parts of South Australia, Queensland, New South Wales and the Australian Capital Territory at this time.

Sydney is getting most of the attention, with residents being warned of a still-developing life-threatening emergency situation.

The Bureau of Meteorology said up to 350mm of rain had already hit certain areas with more on the way, and areas along the Nepean River are said particularly at-risk.

The BOM has issued multiple flood warnings for parts of NSW, including major flood warnings for the Hawkesbury, Nepean and Colo rivers.

“River levels in some parts of these catchments have already reached levels recorded earlier this year. Some are likely to exceed the flood levels reached in the three major flood events since March 2021,” the BOM warned.

Adding that, “An East Coast Low off the NSW Hunter and Central Coast will intensify winds and maintain heavy rainfall in the Hunter, Central Coast, Sydney, Illawarra and Blue Mountains on Sunday night and Monday.

“River levels across the flood warning areas may continue to rise on Sunday and Monday. The Bureau will continue to monitor the situation closely and update forecasts and warnings.”

It’s also been reported that Sydney’s main dam had begun to overspill last night as well.

La Niña conditions are again bringing Australia’s east coast low pressure systems that bring significant rain, strong winds and also hail this year.

Reinsurance rates have risen at the recent mid-year renewals and the catastrophe loss activity of recent years is one driver, as reinsurers are becoming more risk averse to regions repeatedly hit.

S&P said reinsurance rates will rise further there, especially because the intensity and costs of natural catastrophes have been on the rise in Australia.

It seems possible the Insurance Council of Australia will designate this latest flood event as an insurance catastrophe, perhaps as early as tomorrow (Monday).

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