The insurance and perhaps reinsurance market loss from the recent severe convective storms and large hail events in Australia is estimated to have risen by 27% in just one day, reaching A$407 million (around US $280m) as claims start pouring in.
This outbreak of severe convective weather, thunderstorms, large hail and flooding affected a swathe of southeast Australia over the weekend.
The industry insured losses from these storms had already been estimated at A$320 million by the Insurance Council of Australia (ICA), after it counted some 29,000 claims.
By this morning the figure had jumped 27%, with the expected industry loss rising to A$407 million and the number of claims filed reaching more than 41,000.
As of today, 55% of the insurance claims filed from the major hail storm event are in the Australian Capital Territory, 25% in Victoria and 20% in New South Wales.
This overall claims figure is expected to soar even higher, as it is still only two days since the hail storms were continuing to impact the region.
Give large hail has been a major cause of loss from these storms, the automotive lines of insurance are taking a significant impact.
In fact, demonstrating the extent of the damage experienced, some 16,000 motor vehicles are said to have been damaged in Canberra alone from the hail storm that passed through that city on Sunday.
The way claims are piling up from these storms makes it increasingly look like there could be some reinsurance market impact from this hail storm.
In fact, claims have mounted even more quickly than for the December 2018 hail storm catastrophe in Sydney, Australia, which struck on December 20th 2018 but by January saw a claims total still below 40,000.
That hail storm ended up costing the insurance and reinsurance market an estimated almost US $930 million (A$1.36bn).
Whether this latest severe hail storm event in Australia could reach such a level of industry loss remains to be seen. Even if it does, the majority would be expected to come from motor lines, with property lines the rest of the bill. Motor was more than 63% of the Sydney hail loss from December 2018.
It is still far too early to speculate over the eventual industry impacts of these convective storms and large hail events.
Losses will continue to rise and are certain to further pressure insurers already facing high levels of claims from the ongoing bushfire situation in Australia, so could also mean more claims are passed onto the global reinsurance market.
Some Australian insurers are already calling on aggregate reinsurance arrangements to help them pay their bushfire losses. The impacts of this large hail event may also surpass their set per-event retention levels, driving further reinsurance recoveries.
In addition, some of the largest insurers in Australia will share some of their recent catastrophe losses through quota share reinsurance arrangements with global players, which is likely to continue from these hail and storm impacts as well.
Source – https://www.artemis.bm