The sheer scale of the Australian bushfires is hard to comprehend, as what has already been a long bushfire season continues apace. Australia’s most-populous state, New South Wales (NSW) has been the worst-affected, with 12.1 million acres (4.9 million hectares) burnt over the current bushfire season. According to the New South Wales Rural Fire Service, damage has recently escalated with 672 homes destroyed since January 1, during a season which has seen 1,870 homes destroyed and 653 damaged.
There has also been reports of significant damage in the neighboring states, including Victoria to the south and Queensland to the north of NSW. Overall, across southeast Australia, 15.6 million acres (6.3 million hectares) have burned, and 25 people have been killed as of January 7. According to the Insurance Council of Australia (ICA), as of January 10, a total of 10,550 claims have been filed since November 8, amounting to around AU$939 million (US$645 million) in insured losses. The ICA notes that it expects more claims to be filed in the coming weeks.
Australian insurers are under the spotlight, but are holding up very well – insurer IAG has publicly stated it was “… on track to blow its perils allowance for the six months to December by AU$80 million” but had strong reinsurance in place. The article in Financial Review commented that there may be a modest effect on earnings for the industry overall, and premiums may have to rise.Continue reading