Catastrophe insurance data provider PERILS has cited over-reserving as the sole driver behind its significantly lower industry loss estimate from the New South Wales and Queensland flooding in March; what six weeks ago was AU$1.055 billion now stands at $751 million.
Between March 18 and 24 the East Coast of Australia experienced a period of extreme rainfall which resulted in major river and surface water flooding.
While the state of Queensland has suffered similar or even bigger flood losses in the past, for New South Wales it represents one of the largest flood losses on record.
The latest figure is primarily composed of personal lines property losses (representing 69% of the total industry loss), while commercial lines property losses represent 19% and motor losses 12%.
This third loss report provides a detailed breakdown of property and motor losses by postcode, with the data further divided by residential and commercial lines, and loss amounts split into buildings, contents and business interruption losses where available.
“This is the first time we have observed two consecutive decreases in industry loss numbers for a PERILS-captured event,” said Darryl Pidcock, Head of PERILS Asia-Pacific.
“This clearly evidences the difficulties associated with setting adequate loss reserves for this kind of event, which represented a mixture of storm drain and river flood losses.
“All catastrophe events are highly complex, but the complexities associated with flood events are particularly problematic and the March 2021 floods were no exception.
“By providing our detailed industry loss footprints for Australian catastrophe events, our aim is to help the insurance industry better understand and model the increasingly challenging catastrophe risk landscape. Achieving this requires a joint effort and we thank our data-providing insurance partners for their continued cooperation.”
The next update will be made available by PERILS on 24 March 2022, one year on from the event.