Insurers in Australia paid over AU$5.3 billion (US$3.7 billion) in catastrophe-related claims over the summer, according to The Insurance Council of Australia CEO Rob Whelan.
This figure represents a slight increase from the ICA’s previous estimate of AU$5.19 billion.
Commenting during a Senate Inquiry, Whelan said AU$2.34 billion was paid out for bushfire related events, totalling 37,804 claims.
He added said insurers have successfully focused their efforts on helping customers and that almost three-quarters of 9227 residential building claims and 90% of 14,106 contents claims have now been finalised.
He added that, while the removal of debris is a complicating factor in community recovery, the ICA are pleased that clean-up programs both in Victoria and NSW have made solid progress.
“To further help customers through these difficult times, the industry has also brought forward vulnerability and financial hardship provisions of its new Code of Practice, and most insurers have had these in place since the beginning of July,” said Whelan.
Recent analysis by Morgan Stanley suggested that Australia’s primary insurers, which make heavy use of reinsurance and which have exceeded cat budgets in recent years, face a significant increase in reinsurance rates at the upcoming July 1 renewals.
It was suggested that, amid a wider global trend of reinsurance hardening, Australia in particular has seen a consistent increase in natural catastrophe losses over the past decade, possibly due to a growth in underlying exposures.
The total Australian general insurer market consists of 85 primary insurers and 11 reinsurers and collectively wrote AU $51 billion (US $35 billion) during the last financial year.
Of this, AU $47 billion was by primary reinsurers and they in turn incurred outwards reinsurance costs of $13 billion.