$6.5 billion: catastrophe firm finalises flood losses

14 March 2023

Catastrophe data firm Perils has finalised its loss estimate for the NSW/Queensland flood catastrophe in February/March last year at $6.527 billion.

In its previous update last September the Zurich-based firm estimated the February 20 to March 11 event led to insured losses of around $6.292 billion, based on available data at that time.

Perils says the figure covers the property and motor lines of business, with the former contributing to 90.5% of overall industry losses.

The estimate is based on loss data collected from the majority of the Australian insurance market, Perils says.

“The East Coast of Australia has experienced several major storm and flood events during the last three summers driven by persistent La Nina conditions,” Perils Asia Pacific Head Darryl Pidcock said.

“Whilst current forecasts indicate this will weaken to more normal levels, La Nina has caused the largest industry event loss in Australian history.”

He says given the scale and geographic extent of the losses, Perils’ detailed loss and industry exposure data will contribute to industry efforts to manage flood risk and help bolster the resilience of the Australian economy and society to natural catastrophes.

The Insurance Council of Australia’s data has total insured losses from the event at $5.76 billion as of last month. About 46,000 claims are still outstanding out of 240,000 lodged and $4.25 billion has been paid out so far.

The flood catastrophe, the country’s most costly insured event, is now the the second most complained about event since the Australian Financial Complaints Authority (AFCA) was formed in 2018 – behind only the covid pandemic.

More than 2000 complaints have been registered in connection with the flood event. Two-thirds of complaints have been closed, with three-quarters of those closed by agreement or in favour of complainants. $12.9 million in compensation and refunds has been secured.