PERILS, the independent Zurich-based organisation providing industry-wide catastrophe insurance data, has provided its initial property loss estimate for the Australian bushfires for the peak period during December 2019-January 2020.
The initial estimate of the property insurance market loss is A$1,568m based on loss data collected from affected insurers. This is the first bushfire loss event to be reported by PERILS in Australia.
This covers the peak industry event loss for seven consecutive days caused by the bushfires in Australia that occurred at the end of 2019 and beginning of 2020. The event definition follows the 168 hours clause which is predominantly used in the Australian re/insurance market to define a bushfire “event”.
The peak seven-day loss period differs among insurers but generally lies between 20 December 2019 and 6 January 2020. For the majority of insurers, it is between 30 December 2019 and 5 January 2020.
In line with the PERILS event definition, the PERILS loss number of A$1,568m covers the property line of business only.
The Australian 2019-2020 bushfire season is the worst on record, driven by a combination of record high temperatures, record low rainfall, extremely dry bushland and strong winds. During the peak loss period, there were devastating fires across the states of New South Wales, Victoria and South Australia, which caused at least 34 fatalities.
There have been major property losses in rural towns with approximately 10m ha of burnt bushland since September across the affected states. This is an area similar in size to England (13m ha) and over 16 times the size of the 2018 California bushfires.
Losses to the insurance industry are the highest ever for bushfires with a national aggregate total for the season so far of A$1.9bn as given by the Insurance Council of Australia.
To put the losses into context, they surpass the industry losses sustained in the Black Saturday Bushfires of February 2009 (AUD 1,070m; original industry loss), and the Canberra Bushfire of January 2003 (A$350m; original industry loss).