PERILS releases industry loss estimate for March 2021 Australia floods

PERILS, the independent Zurich-based organisation providing industry-wide catastrophe insurance data, has disclosed its initial industry loss estimate for the New South Wales and Queensland floods, which occurred primarily during the period of 18 to 24 March 2021.

PERILS’ initial estimate of the insured market loss, based on loss data collected from the majority of the Australian insurance market, is AUD$1bn. In line with the PERILS event definition, the PERILS loss number covers the property and motor hull lines of business.

An updated estimate of the property market loss from the New South Wales and Queensland floods will be made available by 24 June 2021, three months after the event end date.

The East Coast of Australia experienced an extreme period of rainfall from 18 to 24 March 2021 which resulted in major river and surface water flooding. The rainfall was the result of a blocking high pressure system in the Tasman Sea and a low-pressure system off north-west Australia which fed large volumes of moist tropical air into eastern Australia.

The areas most affected were the Mid North Coast, and the Hunter and Greater Sydney regions. In addition, adjacent parts of south-east Queensland and eastern Victoria were also affected by storm and flood damage. During this seven day period, the New South Wales coast experienced the highest recorded rainfall since national records began in 1900, with some locations along the mid-north coast of New South Wales recording 600-800mm of rain. The resulting damage to private property and businesses was covered to a large part by insurance, while losses to public infrastructure, crops and livestock remained largely uninsured.

Darryl Pidcock, Head of PERILS Asia-Pacific, commented: “During the week ending 24 March 2021, the East Coast of Australia experienced extreme rainfall over both a wide geographic area and an extended period. The resulting damage from storm drain water and river flooding was considerable, especially for New South Wales, where the event represents the largest industry flood loss on record. While damage to private property was largely insured, there were cases where policyholders decided to opt out of flood cover reminding us of the challenges the industry still faces in offering sustainable and affordable flood risk protection in Australia.”

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