January’s Hailstorms in Australia Cost Insurers an Estimated A$1.8B (US$1.3B): PERILS

Article

The industry loss footprint for the January 2020 Australian hailstorms, which occurred Jan. 19-21, 2020, are estimated at A$1.8 billion (US$1.3 billion), according to PERILS, the independent Zurich-based organization that provides industry-wide catastrophe insurance data.

The figure is based on detailed property and motor loss data, collected from the majority of the Australian insurance market.

PERILS’ earlier loss estimates of A$670 million (US$469 million) issued on March 4 and April 21, 2020, did not include motor, so the increase is primarily due to the inclusion of motor losses, which are reported at A$849 million(US$594.2 million), and a 44% increase in property losses, or A$962 million (US$673.3 million).Due to the industry challenges posed by the coronavirus pandemic, PERILS did not carry out a second round of data collection prior to issuing its report on April 21, so the estimate was unchanged.

In this third report, a detailed breakdown of property and motor losses by postcode is provided, with the data further divided by residential and commercial lines and loss amounts split into buildings, contents and business interruption losses. It is complemented with information on damage degrees and hail intensities based on radar measurements by the Australian Bureau of Meteorology.

This report is released six months after the series of hailstorms struck the Australian states of Victoria, New South Wales, Queensland and the Australian Capital Territory. The event was unusual given that it affected all three states and the Australian Capital Territory within a three-day period. The largest impact was experienced in Canberra which suffered from hailstones up to 6 centimeters (2.4 inches) in size.

Insurance losses during the three days were most severe in the Australian Capital Territory, accounting for 55% of the industry loss, followed by Victoria (25%), New South Wales (16%), and Queensland (4%). Across the affected areas, motor losses contributed 47% of the total industry loss.

An updated estimate of the industry loss from the January 2020 Australian Hailstorms will be made available by PERILS on Jan. 21, 2021, one year after the event’s end date.

“This release is of particular market relevance as it is the first time hail motor losses, split into private and commercial [lines of business], are included in a postcode-level loss footprint by PERILS,” said Darryl Pidcock, head of PERILS Asia-Pacific.

“This follows the Australian insurance industry’s support for the inclusion of motor, a measure which will further enhance its understanding of underlying risks and enabling improvements in modelling. This is only possible due to that support from our insurance partners and we are grateful to them for providing their data,” he said.

Source: PERILS

Related: