Insured Losses for Southeast Australia Floods of October 2022 Rise to A$907M: PERILS

Insured losses for floods that hit Southeast Australia in October 2022 have risen to A$907 million (US$600.2 million), according to PERILS, the independent Zurich-based organization that provides industry-wide catastrophe insurance data.

This updated loss figure for the floods, which occurred during the period of Oct. 12-28, 2022, compares to the figure of A$791 million (US$523.4 million) issued by PERILS in its first loss report six weeks after the event, and A$840 million (US$555.9 million) issued by PERILS three months after the event.

The figure is primarily composed of personal lines property losses which represent 65% of the total industry loss, while commercial lines property losses represent 25% and motor losses 10%. The event mainly affected the states of Victoria (81% of the total industry loss) and New South Wales (14%) while losses in Tasmania, Queensland and South Australia were moderate. PERILS’ loss figures are based on detailed loss data by postcode and line of business collected from the majority of the Australian insurance market.

An updated estimate of the property and motor hull market loss from the October floods, including an updated loss footprint, will be made available on Oct. 28, 2023, one year after the event end date.

PERILS explained that the exceptionally wet and stormy weather in October 2022 was driven by a series of low-pressure systems which connected with moist tropical air from warm surface water in the Pacific Ocean. This led to storms and extensive rainfall causing riverine and pluvial flooding mainly in the Murray-Darling basin of Victoria and New South Wales and later in Tasmania. As the flood waters flowed across a wide region, they affected several regional towns, particularly in Victoria and New South Wales, causing damage to homes, businesses, infrastructure and agriculture.

“While Australia is currently neither in a La Niña nor an El Niño phase, the October 2022 floods serve as a reminder of the considerable flood damage caused by La Niña during 2022 on the back of the largest cat loss for the insurance industry, the floods in Eastern Australia of February-March 2022,” commented Darryl Pidcock, head of PERILS Asia-Pacific.

“In contrast to the March event, the October floods primarily impacted rural regions with comparably lower value concentrations. The extent of the affected area was however very large, impacting many towns across several states and causing extensive damage over a wide geographic area,” he added.

“With the release of this detailed industry loss footprint, we believe it provides an opportunity for the insurance industry to better understand flood risks in the impacted regional communities. We remain very grateful to our insurance partners for their continued support,” Pidcock said.

About PERILS

The PERILS Industry Exposure & Loss Database is available to all interested parties via annual subscription. The database contains industry property sums insured and event loss information on a CRESTA zone level and per property line of business. PERILS industry loss estimates provided via the PERILS Industry Loss Index Service can be used as triggers in insurance risk transactions such as industry loss warranty contracts (ILW) or insurance-linked securities (ILS). The service currently covers the following 18 countries: Australia, Austria, Belgium, Canada, Denmark, France, Germany, Ireland, Italy, Japan, Luxembourg, the Netherlands, New Zealand, Norway, Sweden, Switzerland, Turkey, and the United Kingdom. In addition, PERILS industry exposure data are available for Indonesia, the Philippines and Thailand.

Source: PERILS

Photograph: Cars slosh through a flooded road in Heathcote in Australia’s Victoria State, on Thursday, Oct. 13, 2022. Photo credit: James Ross/AAP Image via AP.

Topics Trends Profit Loss Flood Australia