PERILS, an independent Zurich-based organisation providing industry-wide catastrophe insurance data, has revealed that Tropical Cyclone Seroja, which devastated Australia in April 2021, resulted in AU$434 million insured losses.
PERILS' initial estimate of $434 million insured market loss was based on data collected from a majority of insurers in Australia. In line with the organisation's event definition, the loss number covered the property and motor hull lines of business.
Tropical Cyclone Seroja damaged homes, businesses, telecommunications, road infrastructure, and electricity service in several Western Australia (WA) communities from April 11 to 12. Unlike other tropical cyclones in the country, Seroja was considered a “dry” event with moderate rainfall – with most of the damage resulting from the strong winds.
“Seroja was an unusual event both from a meteorological and an insurance perspective. Meteorologically, the event was special due to a phenomenon known as the Fujiwhara effect, whereby Seroja interacted with another cyclone named Odette,” said PERILS Asia-Pacific head Darryl Pidcock. “This interaction pushed Seroja further south along the Western Australian coastline to make landfall at an unusually high intensity for the given latitude.
“From an insurance industry perspective, cyclone Seroja presented considerable challenges, given the degree of destruction in remote and sparsely populated areas, causing claims inflation due to building material supply issues and attracting labour to the region.”
While the industry loss level from Tropical Cyclone Seroja is not unusual for Australia as a whole, it is a significant event for WA as it has not yet experienced a comparable loss since the Perth Hailstorms of 2010 and several damaging cyclones in the 1970s – including Cyclone Joan (1975), Alby (1978), and Hazel (1979).
PERILS did not carry out the initial round of data collection for the Tropical Cyclone Seroja as insurance market data in the six weeks following the event suggested that the insured losses would not exceed the $500 million PERILS event reporting threshold for Australian events.
However, in recent weeks, the insurance industry has experienced significant claims development. In addition, given the local and international coverage generated by the event, PERILS chose to issue a loss report and will continue to monitor for any further significant loss development.
