Catastrophe loss aggregator PERILS has disclosed its initial industry loss estimate of AUD 3.991 billion for the Eastern Australia floods, which occurred during the period of 23 February to 8 March 2022.
The flooding was induced by an extended period of heavy rainfall resulting in major river and surface water flooding.
PERILS’ initial estimate of the insured market loss has been based on loss data collected from the majority of the Australian insurance market.
In line with the PERILS event definition, the PERILS loss number covers property and motor hull lines of business.
An updated estimate of the market loss from the Eastern Australia floods will be made available by 8 June 2022, three months after the event end date.
This loss estimate is currently much higher than Insurance Council Australia’s estimate of just over AUD 1 billion, which has been based on previous flood events.
Darryl Pidcock, Head of PERILS Asia-Pacific, commented: “This event is the largest flood loss on record for the Australian insurance industry, exceeding the record Brisbane floods of 2011. It was a very complex weather event from a meteorological perspective with changing weather systems during the loss period.
“The resulting damage from pluvial and river flooding was considerable, especially for South-East Queensland and the northern regions of New South Wales. Given the complexity of the weather systems, the application of event definition clauses for reinsurance purposes will vary across the market.
“Such clauses can include meteorological conditions and/or loss aggregation periods, such as the 168-hours clause, which means that there is no common market standard applied to the losses. Given these factors, the losses from this event have been reported by PERILS as one single insurance event.”