Australia storm catastrophe extended, as claims rise and Suncorp highlights reinsurance

The Insurance Council of Australia (ICA) has now extended the insurance catastrophe declaration for recent severe storms, heavy rains and flooding to include New Year storms, while the toll in terms of claims is rising and insurance giant Suncorp has highlighted its reinsurance protection.

Just after Christmas, the Insurance Council of Australia (ICA) had declared a “significant event” for the severe weather that had affected the eastern side of Australia since December 23rd.

A couple of days later, the ICA upgraded that to declare an insurance catastrophe event saying that as of December 27th more than 7,500 claims related to the storms had been received across parts of Queensland, New South Wales and Victoria.

Now, the ICA has said that claims lodged with it from these storms have reached 38,000, while the Insurance Catastrophe declaration has been extended to include recent storms, rain and flooding up to January 3rd.

The nearly 38,000 insurance claims have been lodged since December 23rd and the event has been designated as Cat 233.

The ICA said that Australia’s Gold Coast has seen the highest concentration of claims and that now a separate insurance catastrophe declaration (Cat 232) has been made for TC Jasper and flooding in far north Queensland.

Andrew Hall, CEO, Insurance Council of Australia said, “The volume and intensity of the storms that have impacted three states prior to Christmas has caused substantial damage.

“These severe storms have caused significant stress and uncertainty to those impacted, and insurers are already assisting customers with claims and the recovery process.”

Suggesting the total number of claims will have further to run, this morning insurance giant Suncorp has revealed that it has now received roughly 19,000 claims from customers impacted by the weather events.

Here, Suncorp is referring to events over a longer period, saying this is for “ongoing weather events that have impacted Queensland, New South Wales, Victoria and the ACT since the end of November, including ex-Tropical Cyclone Jasper.”

13,000 of the claims are for residential property, Suncorp said, while Queensland appears the hardest hit state with 12,500 total claims and 9,500 home claims filed with the insurer.

Suncorp said that more claims are expected “as the full impact of the current flooding in the South East becomes known.”

Suncorp Group CEO Steve Johnston, said, “While the damage I have seen across both the South East and Far North of Queensland has been significant and the recovery will take time, we have our teams and full supply chains mobilised and in action.

“These rolling series of storms extended across multiple states and as far inland as Orange in the Central Tablelands of New South Wales. We have good capacity with builders, Assessors and Claims Teams already working across multiple impacted communities helping get our customers back on their feet.

“These storms have been a reminder of the devastating impact of extreme weather and our deepest condolences to all those who have lost family and friends.”

Suncorp noted that it is too early to forecast its losses and the cost of these ongoing weather events in Australia, but it still expects to be able to manage those that fell within 2023 under its natural hazard allowance of $680 million for the half year to December 2023.

The insurer also noted that its natural hazard allowance for FY24 is $1.36 billion.

But, Suncorp also highlighted its reinsurance arrangements, in particular noting that it has a comprehensive reinsurance program in place, featuring a maximum event retention of $350 million and a 30% Queensland Home quota share, which perhaps suggests the insurer believes there is a chance some of its reinsurance arrangements are tapped.

With the insurance catastrophe declaration now running across year-end, there could also be some questions over where claims fell, which could benefit insurers, by being able to apportion some to nat cat budgets on either side of the New Year.

There is also the question of which claims fall under Tropical Cyclone Jasper, raising uncertainty as to how many events this period of severe weather may constitute for reinsurance purposes.

Which can have ramifications for reinsurance recoveries, should any come due, so this could be something to watch as claims continue to build-up from these Australian storm events.