A widespread and destructive hail storm has swept through Sydney resulting in over 25,000 filed claims and pushing insured losses high enough for two of Australia’s largest insurers to trigger their reinsurance.
The hail, which caused extensive damage to property and motor vehicles across Sydney and the Central Coast on Thursday was severe enough for The Insurance Council of Australia (ICA) to officially declare a catastrophe.
The ICA has stated that the claims already filed are expected to drive industry losses of over $125 million, a figure that will likely rise as more floods develop and policyholders continue filing claims.
Brisbane-headquartered insurer Suncorp advised that it was too early to accurately estimate the number of claims it expects to receive or the final costs in relation to this event but that it has already received 7,800 claims, which is expected to rise over the coming days.
Suncorp’s reinsurance program limits the financial impact of this event to a maximum of $250 million and is further supported by an additional natural hazard aggregate protection cover.
This cover provides $300 million of cover for events greater than $10 million once aggregate costs have reached $504 million.
Prior to this event, Suncorp estimates total natural hazard costs across Australia and New Zealand for the six months prior to 31 December to be between $350 million and $360 million, compared to the natural hazard allowance of $360 million.
Subsequently, these hail losses may take Suncorp over its $504 million aggregate treaty trigger.
IAG, which has so far counted over 6,500 claims, is also braced for a significant hit from the hail storm and estimates a pre-tax loss in line with its’ maximum first event retention of $169 million, after taking its quota share reinsurance into consideration.
ICA General Manager of Communications and Media Relations Campbell Fuller said the final insured damage bill was unlikely to be known for many weeks.
“The Catastrophe declaration means insurers will make claims from this storm their priority. They will triage claims to ensure the worst-affected policyholders receive urgent attention,” said Fuller.
“It’s a week before Christmas and the insurance industry wants to alleviate the stress being experienced by households and businesses hit by the storm. Insurers are focusing on handling claims and providing assistance to customers as quickly as they can.”
“I encourage anyone who has suffered property damage to lodge a claim online with their insurer or contact their insurer’s call centre as soon as possible. Small businesses that have bought their policies through insurance brokers should contact their broker,” he added.