Catastrophe insurance data organisation PERILS has released its initial industry loss estimate for the severe Southern Australia (SA) storms that struck in late October, suggesting a total of around AU$1,028 million.
The severe storms occurred between October 28 and 30 this year. They first hit several parts of SA and then eventually landed on Victoria and Tasmania, resulting in extensive power disruption that affected up to 526,000 homes and businesses in Victoria and 30,000 in SA, as well as widespread damage to homes and cars from hail, strong winds, and torrential rainfall.
PERILS' initial estimate of insurance market loss was based on loss data it collected from most of the Australian insurance market. The figure was in line with the PERILS event definition and covers the property and motor hull lines of business.
Darryl Pidcock, the head of PERILS Asia-Pacific, said the insurance losses from the severe storms that affected three states were typical for this kind of spring storm – generated by a combination of hail, wind, and surface water flooding.
“The main cause of damage differed by region but was driven by the same low-pressure front sweeping across the three states,” he added. “The event added considerable losses to an already challenging month for the insurance industry following severe weather outbreaks nationally in October. For the state of South Australia alone, the storm will likely be one of the costliest natural catastrophes ever.”
The severe storms that hit SA, Victoria, and Tasmania forced the Insurance Council of Australia (ICA) to declare an insurance catastrophe and work with state governments to ensure that insurance disaster responders can safely travel across borders and support customers despite COVID-19 restrictions.
Global insurance company Insurance Australia Group (IAG) also updated its net natural perils claims costs for the financial year-to-date (FY22) by recording 14,000 claims following the devastating storms. It expects the net cost for this event to reach $169 million, the maximum retention for a first loss under the insurer's catastrophe program.
