Insured Losses From Eastern Australia Floods Estimated at A$4B: PERILS

Initial insurance losses for the Eastern Australia floods are estimated at A$3.99 billion (US$2.97 billion), according to PERILS, the independent Zurich-based organization that provides industry-wide catastrophe insurance data.

The PERILS loss estimate for the floods, which inundated Eastern Australia during the period from Feb. 23 to March 8, covers property and motor hull lines of business.

“This event is the largest flood loss on record for the Australian insurance industry, exceeding the record Brisbane floods of 2011,” commented Darryl Pidcock, head of PERILS Asia-Pacific. (The modeling company RMS said the 2011 floods had total claims of A$2.1 billion, or US$1.6 billion).

“It was a very complex weather event from a meteorological perspective with changing weather systems during the loss period. The resulting damage from pluvial and river flooding was considerable, especially for South-East Queensland and the northern regions of New South Wales,” he added.

“Given the complexity of the weather systems, the application of event definition clauses for reinsurance purposes will vary across the market. Such clauses can include meteorological conditions and/or loss aggregation periods, such as the 168-hours clause, which means that there is no common market standard applied to the losses. Given these factors, the losses from this event have been reported by PERILS as one single insurance event,” Pidcock said.

PERILS said the flooding was initially due to a monsoon trough that developed in the South-East Queensland and northern New South Wales regions. This trough was blocked by a high-pressure system near New Zealand and remained stationary, causing considerable rainfall and associated flooding across the regions affected during the last week of February.

The monsoon trough then moved southwards and developed into an East Coast Low in early March, supported by a strong jet stream at higher altitudes. Another East Coast Low developed towards the end of the first week of March bringing onshore moisture and heavy rainfall to the New South Wales coast.

An updated estimate of the market loss from the Eastern Australia floods will be made available by 8 June 2022, three months after the event end date.

Source: PERILS

Photograph: A building is surrounded by flood waters in Londonderry on the outskirts of Sydney, Australia, on Thursday, March 3, 2022. Around 500,000 people in Sydney and its surrounds were told to evacuate or prepare to flee floodwaters as torrential rain lashed a long stretch of the Australian east coast. Photo credit: AP Photo/Rick Rycroft.

Topics Profit Loss Flood Australia