Insurance Losses for October Storms in Southern Australia Estimated at A$1.03B

The initial industry loss estimates for Southern Australia’s severe storms, which occurred during the period of Oct. 28-30, 2021, are A$1.03 billion (US$739 million), according to PERILS, the independent Zurich-based organization that provides industry-wide catastrophe insurance data.

In line with the PERILS event definition, the PERILS loss number covers the property and motor hull lines of business. An updated estimate of the market loss from the Southern Australia Severe Storms will be made available by Jan. 31, 2022, three months after the event end date.

The month of October saw numerous outbreaks of severe weather along the southern and eastern Australian coastline, notably on Sept. 30 to Oct. 2, Oct. 14 to Oct. 15, and Oct. 18 to Oct. 23, 2021. On Oct. 28 and 29, 2021, yet another low-pressure system moved from South Australia in a south-easterly direction across southern Victoria and Tasmania. The system brought damaging hail, wind and severe thunderstorms which affected populated areas in the three states, among them the major urban centres of Adelaide and Melbourne.

The Adelaide region of South Australia was the first area to be impacted by the storm system on Oct. 28. It brought heavy hailstorms and strong winds to the city and surrounding areas. The storm front moved further southeast into Victoria during the night and into the morning of Oct. 29, bringing heavy rainfall, hail and strong wind gusts of up to 146 km/h. Tasmania started to be impacted by the frontal low during the morning of Oct. 29 with strong winds and torrential rain.

The event caused widespread damage to homes and cars from hail, strong winds and torrential rainfall. Extensive power disruption affected up to 526,000 homes and businesses in Victoria and 30,000 in South Australia. Property damage from the event is widely covered by insurance with losses mainly relating to property and motor hull lines of business with contributions also from crop insurance (not included in the PERILS loss survey).

“The losses to the insurance industry from the Southern Australia severe storms were typical for this kind of spring storm in that they were generated by a combination of hail, wind and surface water flooding,” commented Darryl Pidcock, head of PERILS Asia-Pacific.

“The main cause of damage differed by region but was driven by the same low-pressure front sweeping across the three states. The event added considerable losses to an already challenging month for the insurance industry following severe weather outbreaks nationally in October,” he added. ‘For the state of South Australia alone, the storm will likely be one of the costliest natural catastrophes ever.”

Topics Profit Loss Windstorm Australia