The insurance and reinsurance industry loss estimate for damages from hailstorms that struck the Central Queensland region of Australia on April 19th 2020 has now been raised 39% to A$839 million by PERILS. After this hailstorm event occurred, insurance and reinsurance industry loss reporting agency PERILS AG decided not to provide an industry loss estimate for it, as the firms initial discussions with the market suggested that losses would not rise high enough to surpass the A$500 million loss reporting threshold PERILS has set in Australia. Eventually though, PERILS explained that due to “unusually late and significant claims development” the hailstorms warranted reporting on and delivered an estimate of A$604 million in October. Now, that estimate has risen significantly, by a further 39%, to A$839 million, demonstrating that what once may have seemed a more minor catastrophe had the potential to become far more expensive for the insurance and reinsurance sector. This hailstorm event occurred after severe thunderstorms developed over the Central Highlands and Capricornia districts in Queensland on the afternoon of April 19th last year. Hail as large as 8 to 10 cm in diameter was reported and the storm was called unusual, both due to the overall size of the hail and the fact that it occurred late in the season. The largest hail impact was recorded in Rockhampton and Yeppoon, where extensive damage, primarily to residential homes and commercial properties, was experienced. In addition, wind gusts of up to 100km/h were also recorded in Mackay. Crop damage was also reported as some agricultural areas in the region were hit by hail related to the storms. PERILS said this morning that its new A$839 million industry loss estimate consists of losses under both property and motor hull lines of business, but that unusually for a hailstorm event, motor losses only made up 4% of the total industry loss, the rest being in the Property lines of business. PERILS reiterated this morning that this hail event was challenging for the industry, saying that the industry “faced several challenges dealing with late and significant claims development.” This hail loss came after a costly period for Australian insurers and their global reinsurance counterparts, with the frequency and cost of catastrophe events triggering a number of aggregate reinsurance programs for some of the largest Australian carriers. Darryl Pidcock, Head of PERILS Asia-Pacific, said, “During 2020, the industry experienced a number of challenging events such as the Australian bushfires, hailstorms in January and October as well as an East Coast Low event. Whilst the Central Queensland hailstorms were not as significant in industry loss terms as other events, the event has presented the industry with challenges dealing with significant claims being lodged some months after the event. Lessons gained from these losses include the effect of local building regulations to better understand potential exposures and how these can be captured in models. We are very pleased to support the market by providing this industry loss data to facilitate improvements in modelling especially regarding vulnerabilities and would also like to thank our insurance partners for enabling us to compile this report.” Source - https://www.artemis.bm