The catastrophe insurance data provider PERILS has released a final industry loss estimate of AUD 6.53 bn, for the devastating Eastern Australia floods that occurred over February and March in 2022.
The loss number covers both property and motor lines of business, with motor losses contributing 9.5% of the total industry loss, and the remaining 90.5% due to losses in property lines of business.
This triggered widespread riverine and pluvial flooding in the Murray-Darling basin of New South Wales and Victoria, and later in Tasmania.
The floodwaters mainly affected rural areas and caused considerable damage to homes, businesses, infrastructure and agriculture.
The weather in Australia in 2022 was dominated by La Niña conditions which resulted in above-average rainfall in many regions of northern and eastern Australia.
Both the record floods of late February/March and the floods of October 2022 are linked to this large-scale weather pattern, which is now in its third consecutive summer but anticipated to weaken in the coming months.
While the February-March floods impacted densely populated coastal regions, the October floods mostly affected inland rural areas and losses to the insurance industry were therefore significantly lower (see Worldwide Flooding & Landslides: Listing of Global Events & Economic Loss).
For the affected communities they were still a heavy blow. We, therefore, hope that our work of systematic exposure and loss data collection can contribute to a better understanding of flood vulnerabilities also in such rural communities, and over time help to mitigate the impact of future events.
The floods struck both South-East Queensland and Northern New South Wales in late February and early March.
The event generated the largest loss on record for the Australian insurance industry. It primarily affected South-East Queensland and the north-eastern tip of New South Wales (NSW), as well the NSW Central Coast including the surrounding areas of metropolitan Sydney.
The East Coast of Australia has experienced several major storm and flood events during the last three summers driven by persistent La Nina conditions. Whilst current forecasts indicate this will weaken to more normal levels, La Nina has caused the largest industry event loss in Australian history.
Given the scale and geographic extent of the losses, our 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.
Darryl Pidcock, Head of PERILS Asia-Pacific
Despite the challenges faced by our insurance partners in dealing with these Cat events, they continue to support our efforts, for which we are extremely grateful and remain committed to providing value in return.
Reliable, systematic data is the foundation of effective risk assessment. Without it, the re/insurance industry is significantly exposed to unexpected losses and dislocation.
Making such data available to enable a better understanding of natural catastrophe risk was one of the key drivers behind the launch of PERILS some 14 years ago.
Every Cat event further elevates our value proposition and as the effects of climate change become more visible, this will continue for the foreseeable future.
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