As of 23 Jan. 2020, there have been more than 20,000 fire insurance-related claims filed in Australia since the beginning of November 2019, totaling at an estimated value of $1.65 billion, according to the Insurance Council of Australia. The claims were filed in response to the ICA’s announcement that the large bushfires burning in regions across four states warranted the declaration of a catastrophe (CAT195).
Australia bushfires and associated damage: by the numbers
The most recently released figures are double those reported 7 Jan. by SBS News: The ICA had said that the national bush fire-related damage bill totaled to $700 million at the time, 8,985 claims having been filed since September.
Though a map highlighted in BBC News shows that the majority of the bushfires that flared up in other states were extinguished as of early February, dozens still continued to rage across New South Wales and Victoria, where the first bushfire-related catastrophe declaration was made in September (CAT193). The following month, a catastrophe was again declared in New South Wales as bushfires spread and grew ever larger.
In particular, New South Wales has seen the most extensive amount of residential property damage and fatalities caused by the disaster, with 2,176 homes destroyed and 25 killed. Nationwide, 33 individuals (including 4 firefighters) and 1 billion animals have lost their lives in this season’s bushfires, according to BBC and Decanter, with nearly 2,800 homes damaged beyond repair and more than 27 million acres’ worth of bush, forests and park land charred by the flames.
Will insurers be able to handle payouts?
Combined with the bushfires, hailstorms in both November and January prompted two other catastrophe declarations (CAT196 and CAT201) – first in Queensland, and then again in the same state along with Victoria, New South Wales and the Australian Capital Territory, according to the ICA.
After CAT196 was declared, around 22,000 claims totaling about $166 million were filed, whereas January’s CAT201 – covering over 100 ZIP codes – garnered 69,850 claims, amounting to $638 million, as of 4 Feb.
Despite these figures, industry experts believe that insurers will not have any issues in compensating claims for what is anticipated to be one of the costliest catastrophes in Australian history. S&P Global Ratings Financial Services Ratings Team Director Michael Vine explained in an Insurance Business article that this is mainly due to the fact that allowances are made in anticipation of major catastrophes. Still, professionals believe that the year will prove to be relatively more expensive than usual for insurers, depending on the level of reinsurance protection in place.