PERILS, an independent Zurich-based organisation that provides catastrophe insurance data, has released its third loss estimate for the Australia Christmas Storms, which affected Victoria, New South Wales, and Queensland from Dec. 23-29, 2023.
The updated industry loss estimate is $1.563 billion, based on comprehensive loss data by postcode, property, and motor hull lines of business from most of the Australian insurance market.
This latest figure follows earlier estimates of $1.547 billion issued three months after the event and $1.395 billion six weeks post event.
According to PERILS, the loss distribution includes:
Queensland suffered 71% of the total industry loss, NSW 24%, and Victoria 5%.
The report provides detailed breakdowns of property and motor hull losses by postcode, categorising the data into residential and commercial lines and specifying loss amounts for buildings, contents, and business interruption where available. It also includes postcode-level estimates of hail size, wind gusts, and rainfall intensities.
PERILS plans to release an updated estimate of the market loss from the Australian Christmas Storms on January 2, 2025, marking 12 months since the event concluded.
The storms were caused by a low-pressure system and a cold front interacting with hot, humid, and unstable air masses over Australia’s East Coast, leading to severe convective storm activity, including large hail, intense winds, flash floods, and tornadoes. These conditions predominantly impacted Queensland, NSW, and Victoria.
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Darryl Pidcock, head of Asia Pacific at PERILS, said the extreme weather event emphasises the vulnerabilities of different lines of business.
“Australia experienced a relatively benign period of major natural catastrophes in 2023 in comparison with previous years,” Pidcock said. “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.”
Reinsurance event definition clauses can vary and may include meteorological conditions and/or loss aggregation periods, often set at 168 hours. PERILS follows the prevailing clause, aggregating the losses from the Christmas Storms into one insurance event from Dec. 23-29, 2023.
Although convective storm activity resumed in early January 2024, losses from this period did not meet the PERILS capturing threshold.
