2023 may have been a calmer year for insurance claims but extreme weather still cost the nation $1.6 billion in losses including about $170 million in motor losses from a single adverse event.
Perils, an independent Zurich-based organisation providing industry-wide catastrophe insurance data, released its third loss estimate for the Australia Christmas Storms which affected Victoria, New South Wales, and Queensland from 23 to 29 December last year.
The updated industry loss figure is of $1,563m and is based on detailed loss data by postcode and property and motor hull lines of business that Perils collects from the majority of the Australian insurance market.
While the majority of the figure, 72 per cent relates to property losses from the private sector, eleven per cent has been attributed to motor losses including damage caused by extreme elements such as large hail shattering windscreens and damage to panels.
Almost three quarters of the claims were made in Queensland, a quarter in NSW and five percent Victoria.
The damage total follows a US Crash Course report that looked at the increasing cost of repairs growing out of extreme weather events including hailstorms and hurricanes.
It found a 17 per cent increase in the number of hailstorms meant claims for damage had increased to 11.8 per cent of comprehensive claims and these were 21 per cent more costly, involving not only broken windscreens and dented panels but also damaged sensors and cameras.
The low-pressure system that cause all the damage in 2023 in Australia was caused by a, a low-pressure system and its associated cold front that collided with hot, humid, and unstable air masses over the East Coast of Australia causing an extended period of severe convective storm activity with large hail, intense winds, flash floods, and tornadoes.
Perils Head of Asia Pacific Darryl Pidcock says the damage came amidst a relatively benign period of major natural catastrophes in 2023 compared to previous years.
“Notwithstanding, it highlights the increasing risk not only of severe convective storms along coastal regions but, as we observed in this case, the potential for competing air pressure systems prolonging storm activity over an extended period,” Pidcock says.
“Combined with PERILS Industry Exposure data it enables further insights to be obtained especially regarding vulnerabilities of the different lines of business by linking physical intensities with insurance losses.”