PERILS updated insurance industry loss for Australia Christmas Storms

PERILS, an independent Zurich-based organization providing catastrophe insurance data, has released the third loss estimate for the Australia Christmas Storms, which hit Victoria, New South Wales, and Queensland from December 23 to 29, 2023.

PERILS updated insurance industry loss estimate stands at AUD 1,563 million. This figure, derived from detailed loss data by postcode and property and motor hull lines, reflects contributions from the majority of the Australian insurance market.

It updates previous estimates of AUD 1,547 million (three months post-event) and AUD 1,395 million (six weeks post-event).

Personal property losses account for 72% of the total industry loss, commercial property losses 17%, and motor losses 11%. Queensland bore the brunt of the damage, with 71% of the total industry loss, followed by New South Wales at 24%, and Victoria at 5%.

PERILS updated insurance industry loss for Australia Christmas Storms

This third report includes a detailed breakdown of property and motor hull losses by postcode (high-resolution CRESTA Zones), divided into residential and commercial lines, and categorized into buildings, contents, and business interruption insurance where applicable. It also features postcode-level data on maximum hail size, wind gusts, and accumulated rainfall intensities.

PERILS will provide an updated estimate of the market loss from the Australian Christmas Storms on January 2, 2025, twelve months after the event.

Australia Christmas Storms 2023: Industry loss footprint of Australia Christmas Storms, 23–29 December 2023
Australia Christmas Storms 2023: Industry loss footprint of Australia Christmas Storms, 23–29 December 2023: In its third loss report, PERILS estimates the resulting property and motor hull market loss at AUD 1,563m. The states of Victoria, New South Wales, and Queensland in Eastern Australia experienced a prolonged period of severe convective storm activity with large hail, intense winds, flash floods, and tornadoes. Hail was a major contributor to property damage with hail sizes of up to 10cm in diameter reported

From December 23-29, 2023, a low-pressure system and a cold front met hot, humid, unstable air over Australia’s East Coast. This collision caused severe storms, including large hail, strong winds, flash floods, and tornadoes, affecting Queensland, New South Wales, and Victoria.

Darryl Pidcock, Head of Asia Pacific, noted that while 2023 had fewer major natural disasters than previous years, the event underscored the growing risk of severe coastal storms and the potential for prolonged storm activity due to competing air pressure systems.

The detailed loss report includes postcode-level data on hail, wind, and rainfall intensities. Combined with PERILS Industry Exposure data, it provides insights into the vulnerabilities of various business lines by linking physical intensities with insurance losses.

Event definition clauses for reinsurance purposes vary, often including meteorological conditions and/or loss aggregation periods, typically 168 hours. PERILS follows the predominant clause, aggregating losses from the Christmas storms into a single insurance event for December 23-29, 2023.

While storm activity resumed in early January 2024, the losses from this period remain below PERILS’ capturing threshold.

Nataly Kramer   by Nataly Kramer