‘Black summer’ bushfires cost insurers $2 billion

PERILS has issued a final estimate of the insurance market loss from the ‘Black Summer’ bushfires of 2019/2020 of A$1.9 billion. The loss number cover the property and motor hull lines of business.

The industry loss data cover the peak period for the bushfires which occurred during the turn of the year 2019/2020. The figure is based on detailed loss data collected from the majority of the Australian insurance market. The peak seven-day loss period differs among insurers but generally lies between 20 December 2019 and 6 January 2020.

The report is released 12 months after the worst Australian bushfire season on record. The bushfires affected the entire continent and resulted in 33 fatalities and an estimated 24 million hectares of burnt land between September 2019 and March 2020.

Insurance losses during the New Year peak period were most severe in the states of New South Wales, which accounted for 71% of the industry loss, Victoria (17%) and South Australia (12%). In light of the devastating bushfire season, the Federal Government’s Royal Commission into National Natural Disaster Arrangements released its final report in October 2020 which tabled a comprehensive list of improvements for future response and recovery coordination. 

Darryl Pidcock, head of PERILS Asia-Pacific, commented: “One year on from the Black Summer bushfires, this release of the final loss report provides a timely reminder of the devastation such an event can cause to local communities. This was one of several major Cat events to impact Australia in 2020, with the insurance industry playing a critical role in enabling affected communities to rebuild during the year. The detailed data resolution in this updated industry loss footprint can enhance the insurance industry’s understanding of the impact of future bushfire events as there is always more to learn about these devastating losses.”