Catastrophe loss data aggregator PERILS has estimated that insurance industry losses resulting from the recent bushfire outbreak in southeast Australia will amount to AU $1.568 billion (US $1.05 billion).
The figure is well below the AU $1.9 billion estimated released by the Insurance Council of Australia (ICA) last week, but PERILS explained that its figure only accounts for the peak industry event loss.
This means its only covers the peak seven-day loss period for each re/insurer, based on the 168 hours clause used to define bushfire ‘events’ in the Australian market.
For most companies, this period was between December 30, 2019 and January 6, 2020, but there was some variation.
Additionally, the PERILS loss number only covers property losses, meaning other costs such as auto and business interruption, are not factored in.
As usual, the firm plans to release an updated estimate of the insurance market loss three months after the event’s end date, on April 5, 2020.
The Australian 2019/2020 bushfire season is the worst on record, driven by a combination of record high temperatures, record low rainfall, extremely dry bushland and strong winds.
Fires burned through more than 11 million hectares of land, which is an area similar in size to England, and more than 16 times the size of the 2018 California bushfires.
“The bushfire season has had a devastating impact on many local communities, which may take years to recover,” said Darryl Pidcock, Head of PERILS Asia-Pacific.
“Our sincere sympathies go out to those who have also lost loved ones, including the firefighters who have made considerable sacrifices. While the quantum of insurance losses will cover only a portion of the overall economic cost of the disaster, it still plays a very important function in enabling individuals, businesses and communities to rebuild,” he continued.
“PERILS’ mission by making available insurance industry loss information from this event is to help improve the understanding of bushfire insurance risk going forward and to facilitate the availability of capacity for future bushfire events.”
