PERILS discloses industry loss estimate for April 2020 Central Queensland Hailstorms

PERILS, the independent Zurich-based organisation providing industry-wide catastrophe insurance data, has disclosed its fourth and final industry loss estimate for the April 2020 Central Queensland hailstorms.

The final estimate of the insurance market loss is AUD 839 million. This compares to the third loss estimate of AUD 604 million which was issued by PERILS on 19 October 2020, six months after the event. In line with the PERILS event definition, the loss number covers the property and motor hull lines of business. Unusual for a hailstorm event, motor losses contributed only 4 percent of the total industry loss, while 96 percent were due to losses in property lines of business.

This final report, which is based on detailed loss data collected from the majority of the Australian insurance market, provides a comprehensive breakdown of property and motor losses by postcode. The data is further divided by residential and commercial lines, and provides loss amounts split into buildings, contents and business interruption losses where available. It is complemented with information on damage degrees and hail size based on radar measurements by the Australian Bureau of Meteorology. As such, this dataset is well suited for the validation of hail vulnerability functions for motor and property risks in probabilistic cat models.

This report is released twelve months after the hailstorms struck the central region of the state of Queensland, Australia. Severe thunderstorms developed over the Central Highlands and Capricornia districts in Queensland on the afternoon of 19 April producing hail of 8 to 10 cm in diameter. This was an unusual event for the region given the partly extreme size of hailstones and the fact that it occurred late in the season. The insurance industry also faced several challenges dealing with late and significant claims development.

Darryl Pidcock, Head of PERILS Asia-Pacific, said: “During 2020, the industry experienced a number of challenging events such as the Australian bushfires, hailstorms in January and October as well as an East Coast Low event. Whilst the Central Queensland hailstorms were not as significant in industry loss terms as other events, the event has presented the industry with challenges dealing with significant claims being lodged some months after the event. Lessons gained from these losses include the effect of local building regulations to better understand potential exposures and how these can be captured in models. We are very pleased to support the market by providing this industry loss data to facilitate improvements in modelling especially regarding vulnerabilities and would also like to thank our insurance partners for enabling us to compile this report.”

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