Australia Christmas storms industry loss lifted 11% to AU $1.55bn by PERILS

The insurance industry loss estimate from severe storms that affected eastern Australia through the Christmas period has been updated and raised by almost 11% to AU $1.547 billion (around US $1.05bn) by PERILS AG.

This catastrophe event loss estimate spans the time period of 23rd to 29th December 2023, which PERILS selected for its loss estimate due to the common hours clause used in Australia.

PERILS first estimate given in February was for the event to cost insurance and reinsurance interests AU $1.395 billion (around US $905m).

The Australia Christmas Storms struck the states of Victoria, New South Wales, and Queensland and the severe convective storm activity saw large hail, intense winds, flash floods, and tornadoes driven by a low-pressure system over southeastern Australia which was blocked by a high-pressure system over the northern Tasman Sea.

This system drove numerous convective storm cells and intense thunderstorms, while it was the impacts of large hail, strong winds, tree fall and flying debris as well as flash floods that drove the insured damages.

PERILS estimate is based on claims falling to the property and motor hull lines of insurance business.

Explaining the reason for its selection of loss event duration, PERILS said, “In Australia, storm event definition clauses for reinsurance purposes vary and can include meteorological conditions and/or loss aggregation periods with the majority being 168 hours.

“PERILS generally follows the predominant clause and as a consequence the losses from the Christmas Storms are aggregated into one single insurance event for the period of 23 to 29 December 2023.”