PERILS says that its industry loss estimate for the Eastern Australia floods earlier this year now stands at AUD $4,895m.
It said that in line with its event definition, the loss number covers the property and motor hull lines of business. Earlier estimates of the cost had placed it at AUS $3,991m. PERILS said that a further estimate will be released in mid-September.
Darryl Pidcock, head of PERILS Asia-Pacific, commented: “The complexity and volume of claims caused by this weather event are presenting significant challenges to the insurance industry which is reflected in the increase in PERILS’ second loss estimate. A key driver is claims inflation due to rising labour and supply costs which has become a critical issue for the industry.”
He added: “Following PERILS’ initial loss estimate, we have also adjusted the event loss period which now runs from 20 February to 11 March. This better reflects the range of loss periods applied to this event by affected insurers as there is no common market standard applied to the event definition.”
From 20 February to 11 March 2022, an extended period of heavy rainfall along the east coast of Australia caused major river and surface water flooding. A monsoon trough along the South-East Queensland and northern New South Wales coast was blocked by a high-pressure system resulting in the extended period of rainfall and associated flooding. An East Coast Low developed in early March as the monsoon trough moved southwards, bringing onshore moisture and heavy rainfall to the New South Wales coast during early March.
This loss estimate is much higher than Insurance Council Australia’s estimate of just over AUD $1bn, which has been based on previous flood events.