Final Insured Losses for Australian Bushfires of 2019/2020 Estimated at A$1.866B

Insured losses for the Australian bushfires of 2019/2020 rose to A$1.866 billion (US$1.441 billion), according to estimates issued by PERILS, the independent Zurich-based organization that provides industry-wide catastrophe insurance data.

This fourth and final industry loss estimate is a slight increase over the third loss estimate of A$1.861 billion (US$1.437 billion), which was issued by PERILS on July 6, 2020, six months after the event.

In line with the PERILS event definition, the PERILS loss number covers the property and motor hull lines of business.

The industry loss data cover the peak period for the bushfires which occurred during the turn of the year 2019/2020. The figure is based on detailed loss data collected from the majority of the Australian insurance market. The industry loss footprint applies the dominant event definition clause used in the Australian re/insurance market and covers the peak losses which occurred within a period of 168 consecutive hours (seven days) on Australian territory.

The peak seven-day loss period differs among insurers but generally lies between Dec. 20, 2019 and Jan. 6, 2020. For most insurers, it is between Dec. 30, 2019 and Jan. 5, 2020.

This report is released 12 months after the worst Australian bushfire season on record, known as the “Black Summer,” said PERILS. The bushfires affected the entire continent and resulted in 33 fatalities and an estimated 24 million hectares of burned land between September 2019 and March 2020.

Insurance losses during the New Year peak period were most severe in the states of New South Wales, which accounted for 71% of the industry loss, Victoria (17%) and South Australia (12%).

“One year on from the Black Summer bushfires, this release of the final loss report provides a timely reminder of the devastation such an event can cause to local communities. This was one of several major cat events to impact Australia in 2020, with the insurance industry playing a critical role in enabling affected communities to rebuild during the year,” commented Darryl Pidcock, head of PERILS Asia-Pacific.

“The detailed data resolution in this updated industry loss footprint can enhance the insurance industry’s understanding of the impact of future bushfire events as there is always more to learn about these devastating losses,” he added.

This industry loss report includes a detailed breakdown of property and motor losses by postcode, with the data further divided by residential and commercial lines. Loss amounts are provided for buildings, contents and business interruption, and include fire intensity metrics and mean damage ratios. The fire intensity metrics per postcode, which are based on satellite data, can be used for correlation analysis of observed damage degrees and to derive vulnerability functions to model bushfire risk in Australia.

Source: PERILS

Photograph: Fires in Mallacoota, Australia on Jan. 2, 2020. Photo credit: Darrian Traynor/Getty Images.

Topics Profit Loss Australia