Insurers brace themselves for cost of Australian wildfire destruction
- Lloyd’s of London said it is too early to put a number on the impact of the blazes
- The blazes have burned through an area almost three times the size of Wales
- Local news sources have reported that insurance claims could top £320 million
Insurers are counting the rising cost of the wildfires that are raging across Australia.
Distraught homeowners and other policyholders have already filed 4,299 claims in relation to the blazes, according to the Insurance Council Of Australia, which estimates the cost of damages has hit £158 million.
As the fires continue to burn, local news sources have reported that insurance claims could top £320 million.
Insurers are bracing themselves for a deluge of claims connected to the Australian wildfires
Global reinsurance firms, such as Swiss Re and London-listed Hiscox, will eye the rising claims warily. Though most are likely to be limited to Australian firms, reinsurers take on risk from policies worldwide.
Lloyd’s of London, the insurance and reinsurance market, said it is too early to put a number on the impact the blazes will have on its members.
New South Wales (pictured) has been the worst-hit area, although South Australia, Victoria and Queensland have also been ravaged. As of yesterday, New South Wales reported 1,289 homes destroyed and 442 damaged, and 2,218 outbuildings destroyed with 937 damaged.
The death toll is expected to rise as temperatures are set to hit 45C (113F) over the weekend, with 18 fatalities already recorded.
Two years ago, accountant Deloitte warned that Australia would face growing costs from natural disasters. The total could hit £21 billion per year by 2050, it added. Australia experienced its hottest year on record in 2019. The average maximum temperature across Australia reached a record 41.9C (107.4F) on December 18.
However, the costs of the current spate of wildfires is not thought to be as disastrous as the Black Saturday fires which rampaged across the country in 2009.
A royal commission which was called in the wake of that crisis put the cost at £2.3 billion, of which £640 million was insurance claims.
The most recent blazes have burned through about 5.5 million hectares of land – an area almost three times the size of Wales.