PERILS hikes Australian flood estimate 23% on inflation & claims snags

Swiss-based nat cat researcher  PERILS upped its estimate for Eastern Australian flood damage over an extended three-week period of February and March by 23% to A$4.895 billion ($3.51 billion) as a host of claims difficulties blurred the view and runaway inflation continues to increase the count.

The estimate includes losses from property and motor hull lines from flooding between February 20 and March 11, an extended period versus the initial estimate.  PERILS based its estimate on loss data it says was collected from the majority of the Australian insurance market.

PERILS issued its initial estimate at A$3991 billion on April 19 and expects to have its final say, including a detailed footprint breaking down the industry loss into postcode areas and lines of business, by mid-September.

Darryl Pidcock, head of  PERILS Asia-Pacific, commented: “The complexity and volume of claims caused by this weather event are presenting significant challenges to the insurance industry which is reflected in the increase in  PERILS' second loss estimate.

“A key driver is claims inflation due to rising labour and supply costs which has become a critical issue for the industry. Following  PERILS' initial loss estimate, we have also adjusted the event loss period which now runs from 20 February to 11 March. This better reflects the range of loss periods applied to this event by affected insurers as there is no common market standard applied to the event definition.”

Did you get value from this story? Sign up to our free daily newsletters and get stories like this sent straight to your inbox.