The insurance industry losses from the ongoing bushfires ravaging parts of Australia continue to rise, with the Insurance Council of Australia (ICA) now putting the total at USD 485 million (AUD 700 million).
The latest figure, which is up by more than 60% on the USD 300 million (AUD 431 million) reported yesterday, is from 8985 claims since September from the New South Wales, Victoria, Queensland, and South Australia territories.
The ICA warns that insurers are expecting many more claims to come in over the coming days and weeks, and as a result, it’s expected that total insurance and reinsurance industry loses from the bushfires will continue to soar.
Rob Whelan, Chief Executive Officer (CEO) of the ICA, explains that earlier today, a delegation from the insurance sector met Federal Treasurer, Josh Frydenberg and Commonwealth officials to brief them on the insurance industry’s response to the ongoing bushfires.
A number of insurers represented the industry alongside the ICA, including CEOs and senior staff from major firms such as IAG, Suncorp, QBE, Allianz, Zurich, Commonwealth Bank and Westpac.
IAG announced last week that it had capped tapped its 2019 reinsurance program to recover losses from the ongoing bushfires in Australia, a sign that the bushfires would lead to a reinsurance market hit.
Furthermore, the reported losses have increased significantly since then, suggesting that there’s potential for the reinsurance market to be hit more significantly than expected, although only time will tell.
News reports now state that a region the size of South Korea has been destroyed by the bushfires, and while rainfall has occurred in some areas, a return to higher temperatures on Thursday is expected to see fires “take off” once again.
“I discussed ways in which these funds might assist all property owners and communities. The centralised and coordinated property clean-up that followed the Black Saturday bushfires in 2009 was raised as effective and efficient and improved outcomes for property owners. The ICA thanks the Treasurer for undertaking to raise this with state governments.
“Insurers reiterated that they are dealing compassionately and sensitively with customers and are ensuring the claims process runs as painlessly and seamlessly as possible,” explains Whelan.
At USD 485 million, the current 2019/2020 bushfire season is the second largest for the insurance and reinsurance industry, falling behind the Black Saturday fires noted by Whelan, which resulted in a re/insurance industry loss of more than USD 1 billion.
However, with more claims expected in the coming weeks and the fact that the fires are ongoing, the total loss for the current season is expected to edge closer to the USD 1 billion.