Zurich-based catastrophe insurance data provider PERILS AG, has provided a third update on the insured loss estimate for the Australia Christmas storms which impacted the states of Victoria, New South Wales, and Queensland during the period of 23 to 29 December 2023, lifting the figure to AU$1.563 billion (US$1.04 billion).
In February, PERILS disclosed its initial industry loss estimate for the storms of AU$1.395 billion (US$903 million).
Then, fast-forward to April, the company disclosed its second loss estimate for the storms, which sat at AU$1.547 billion (US$1 billion).
This third, higher insurance industry loss estimate is based on detailed loss data by postcode and property and motor hull lines of business collected from the majority of the Australian insurance market.
It’s important to highlight that the figure is composed of personal lines property losses which represent 72% of the total industry loss, while commercial lines property losses represent 17% and motor losses 11%.
Moreover, the event mostly impacted the states of Queensland (71% of the total industry loss), New South Wales (24%) and Victoria (5%).
Outlining details of the event, PERILS noted that this was due to a low-pressure system and its associated cold front colliding with hot, humid, and unstable air masses over the East Coast of Australia, resulting in an extended period of severe convective storm activity with large hail, intense winds, flash floods, and tornadoes affecting the Eastern Australia coastline.
Furthermore, in line with the PERILS reporting schedule, an updated estimate of the market loss from the storms will be made available in early January 2025, twelve months after the event end date.
Darryl Pidcock, Head of Asia Pacific, commented: “Australia experienced a relatively benign period of major natural catastrophes in 2023 in comparison with previous years. Notwithstanding, it highlights the increasing risk not only of severe convective storms along coastal regions but, as we observed in this case, the potential for competing air pressure systems prolonging storm activity over an extended period.
“There is considerable information available in this loss report with detailed loss collection at postcode level, as well as hail, wind and rainfall intensities. Combined with PERILS Industry Exposure data it enables further insights to be obtained especially regarding vulnerabilities of the different lines of business by linking physical intensities with insurance losses.”
