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Recent storms Australia’s fifth declared cat of 2015

May 5, 2015   by Canadian Underwriter


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Storms between Apr. 30 and May 3 in southeast Queensland and northern New South Wales (NSW) – prompting 7,500 claims and initial loss estimates of AU$26 million as of Monday morning – represent Australia’s fifth declared disaster so far in 2015.

Severe tropical cyclone Marcia in February has resulted in 35,366 claims, accounting for AU$446 million in losses. Photo: Weather Blue.

The Insurance Council of Australia (ICA) declared the storms a catastrophe Monday as a result of the estimated insured damage resulting from heavy rain and inundation. “Most claims are typical for storm damage (water entering homes due to leaking roofs and overflowing gutters, water damage to cars) though some properties have been inundated,” notes a statement from ICA.

The council announcement comes just weeks after NSW was hit. “East coast low-pressure systems can cause widespread damage, just like the system that caused havoc in NSW less than three weeks ago,” Rob Whelan, ICA’s chief executive officer, says in the statement. “Insurers expect many more (claims) will be lodged this week and are standing by to assist their customers,” Whelan adds.

The storm last month represents Australia’s most costly cat event to date this year, with ICA reporting 68,243 claims and estimated insured losses of AU$301 million as of 10 am Monday.

Related: Insurance Council of Australia has received more than 19,500 claims following storm

That number has almost doubled since the last ICA update on May 1, in which the council reported that 35,150 claims had been launched: 18,964 residential property claims; 11,237 domestic contents claims; 1,987 domestic motor claims, and the remaining claims being commercial. As of May 1, the estimated losses were AU$249 million, with AU$166 million of that relating to domestic claims and AU$83 million relating to commercial claims.

Australia’s next most expensive cats – in order of estimated insured losses to date – are as follows:

• severe tropical cyclone Marcia in February – 35,366 claims accounting for AU$446 million in losses (of the total, there were 19,803 residential property claims, 11,038 domestic contents claims and 1,486 domestic motor vehicle claims, with an estimated loss of AU$307 million, with the remainder being commercial, with an estimated loss of AU$139 million);

• Sydney Anzac Day hailstorm in April – 19,000 claims accounting for AU$125 million in losses (as of May 1, most of the claims were for light damage to homes and vehicles, although some commercial claims had been received and, overall, more claims were expected); and

• South Australian bushfires in January – 996 claims accounting for AU$36.6 million in losses (as of May 1, there were 658 residential property, contents and motor vehicle claims, 61% of which are closed, for an estimated loss of AU$24.6 million, and 338 commercial claims, 58% of which are closed, for an estimated loss of AU$12 million).

Cunningham Lindsey, which serves clients in the insurance industry through a network of offices in more than 60 countries, is among the service providers to respond in the aftermath of the storms. The company is mobilizing loss adjusters from across its global network to help teams in Australia respond to the thousands of claims generated by the storms, it notes in a statement.

The response teams include about 20 experts from New Zealand, the United Kingdom and the United States “who have recently dealt with large events in their own countries and are highly experienced in the complexities of severe storm losses,” the statement notes.

“The priority right now is to mitigate and adjust these losses as quickly as possible, so that claims can be paid and life can get back to normal for the hundreds of thousands of people affected by these terrible storms,” says Damon Bennett, CEO, Australia for Cunningham Lindsey.

“Our extensive resources and organized field operations enable us to effectively manage catastrophe claims and minimize business interruption to our clients,” adds David Repinski, president and chief client officer of Cunningham Lindsey US. “Cunningham Lindsey is strategically prepared for the unique challenges of a catastrophe of this magnitude,” Repinski adds.

Crawford & Company, for its part, also lent a hand in Australia in the wake of the destruction left by Cyclone Marcia in February.

Three of Crawford’s U.K.-based general property adjusters made their way down under in March to support clients in the clean-up process, notes a company blog post in March by George Delorey, Helen Stanley and Nathan Holt. “The trio has been dealing with numerous claims for the region’s agricultural sector, tropical coastal resorts and mining industry,” the blog states.

Holt explained that the damage seen was mostly the result of strong winds. “We’ve seen a huge range from the minor claims such as a simple dislodged TV antenna to the destruction of entire properties. We’ve also seen quite a significant amount of timber construction flattened by uprooted trees,” he noted.

There were also losses related to heavy rain that caused a cascade of significant issues. “In one farming region, Marcia had caused the flooding of nearby rivers and the auto release of water from a dam once it had exceeded its normal capacity. This left hundreds of acres of farmland under several metres of water,” Holt reported on behalf of the Crawford responders.

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