Insurance claims from recent days of severe storms and hail across Queensland and New South Wales in Australia are rising still, with this weather catastrophe set to be the most costly of the current financial year so far for the domestic market insurers.
On Tuesday, the Insurance Council of Australia (ICA) declared an Insurance Catastrophe for the strong winds and damaging hail that affected South East Queensland between Sunday, November 23, and Monday, November 24, citing more than 16,000 claims as already having been received.
By November 26th, the ICA had reported that claims from this storm and hail outbreak has surpassed 27,800.
Now, the ICA has extended its catastrophe declaration for these storms and hail outbreaks, to cover the entirety of Queensland and New South Wales and to now cover impacts between 20th and 27th November, as severe weather has continued and been more widespread.
As of this morning, the number of insurance claims received by insurers and reported back to the ICA from that period stands at 44,600, a figure likely to continue rising now with the extension of the catastrophe declaration to cover severe weather right up to yesterday.
ICA CEO Andrew Hall commented, “The extension of our Insurance Catastrophe Declaration points to the severity of this ongoing extreme weather that continues to impact widespread regions across both Queensland and New South Wales.
“We also acknowledge that some policyholders face a compounding impact, as their regions have been hit multiple times by different storms during this period, with damage ranging from hail dents on motor vehicles to roofs torn off by strong winds.
“Insurers are prioritising claims arising from this event and I encourage anyone who is yet to make a claim to reach out to their insurer.”
As we reported yesterday, Australian primary insurance giant Suncorp Group is set to benefit from catastrophe reinsurance recoveries to help it manage losses from these recent severe thunderstorms and hail, expecting a net cost at its full reinsurance retention as coverage attaches at $350 million.
Suncorp pegged the claims burden from these storms as its most costly natural hazard event of the current financial year, which for Australian insurers begins on July 1st.
Already Suncorp estimates that up to $1.275 billion of its natural hazards allowance has been used up, out of $1.77 billion and with claims still on the rise and the weather set up for Australia looking reminiscent of years where convective type storms have challenged insurers in the past, there’s no guarantee this is the last full retention loss under this insurers reinsurance arrangements.
Other major Australian insurers have yet to report their claims and any estimate of expected losses from these storms.
IAG’s catastrophe reinsurance protection attaches for a single event at $500 million, while QBE reduced its attachment points this year and for an Australian event it seems coverage attaches at $260 million.
Both have quota-share arrangements as well, which naturally may see reinsurers backing those arrangements taking a proportion of the claims burden from these storms.
These storms may serve as a reminder to the reinsurance sector that Australia has experienced numerous severe weather events of this kind over the last decade and it will be interesting to see if this fresh loss experience in the country might serve as a reminder that discipline needs to be maintained on attachments at the next renewals, despite the softening of the property catastrophe reinsurance market.
