PERILS releases final insurance loss estimate for October 2021 Southern Australia storms

PERILS, an independent Zurich-based organisation providing industry-wide catastrophe insurance data, has published its fourth and final insurance loss estimate for the catastrophic storms in Southern Australia that occurred from October 28 to 30, 2021.

The report estimated that the extreme weather event resulted in AU$972 million in insurance market loss, down from the third loss estimate of AU$1,016 million issued by PERILS on May 13, 2022. In line with the organisation’s event definition, the loss number covers the property and motor lines of business, with property loss accounting for 60% of the total industry loss, and motor loss contributing 40% to the total loss.

Darryl Pidcock, head of PERILS Asia-Pacific, commented that the event had been somewhat overshadowed by the February-March 2022 Eastern Australian floods, deemed Australia’s costliest flood and third-costliest natural disaster.

Read more: PERILS releases initial insurance losses for Queensland and NSW flooding

“This was a highly complex event with hail, wind, and rainfall-related losses experienced over such a wide geographic region. This detailed report includes losses by line of business, postcode, and physical intensities, further supporting efforts by the industry to improve its understanding of these respective perils. With the La Nina meteorological phenomenon currently present for the third year in a row, the east coast of Australia continues to face uncertain weather conditions. We would like to thank our insurance partners for their continued invaluable support,” Pidcock said.

The severe storms in Southern Australia in October 2021 were caused by a low-pressure system moving south-easterly across South Australia, Victoria, and Tasmania. The system generated a mix of hail, wind, and severe thunderstorms across the three states, significantly impacting Adelaide and Melbourne.

PERILS’ final report provides a detailed breakdown of property and motor losses by postcode, with the data further divided by residential and commercial lines. It also includes information on hail size, wind gust speed, rainfall amount, and damage degrees that show damage as a percentage of the sums insured. These metrics may be used to assess the damageability of insurance property and motor risks and help validate vulnerability functions in probabilistic catastrophe risk models.