Insurers in Australia are now facing almost A$2.6 billion of catastrophe losses just from the last five months, with the latest being a spate of extreme rainfall and flooding in recent days that increases the chances of more losses leaking into the reinsurance market from the country.Sydney flooding image from ABC News’ Oscar Coleman.Severe storms brought torrential rainfall to the Australian east coast in recent days, resulting in significant flooding.The rains are said to have been the heaviest in 30 years to hit the Sydney area and surroundings, with a huge 391.6mm of rain recorded in just four days in Sydney, which is over three times the average rainfall for February.The Insurance Council of Australia (ICA) has reported more than 10,000 claims from the storms and rain, with claims running to $45 million already.The majority of these claims are for property damage caused by storm and rain driven flooding, as well as strong winds.ICA Head of Risk and Operations Karl Sullivan commented, “Insurers expect a large number of claims will be lodged over the next 48 hours as property owners inspect the damage to homes and businesses and contact their insurers.It’s likely many householders are unable to contact their insurers due to telecommunications and power interruptions, but insurers are standing by to help.“So far most of the claims are from south-east Queensland and along New South Wales coastal regions, but damage has also been reported several hundred kilometres inland and in the ACT.”Insurers are also on watch for potential damage from the weekend’s Cyclone Damien which struck Western Australia’s Pilbara region.However this is not expected to be particularly significant given the relatively remote nature of the area.The rainfall and storms have added to an expensive half-year for Australian insurers, which has already seen a number calling on reinsurance support to help them pay their claims.Catastrophe related claims for insurers in Australia have reached almost A$2.6 billion in just the last five months, the Insurance Council noted.Major recent catastrophe events in the country, such as the bushfires and hail storms, have already driven some insurers to claim on their reinsurance provisions, but an increasing toll and fresh events means those claims may rise further.Catastrophe events that have struck Australia in the last five months include: September bushfires in New South Wales and Queensland that caused 497 claims and $37 million of losses; October’s Rappville New South Wales bushfires which drove 255 claims and insured losses of $19 million; November to February bushfires that struck Queensland, New South Wales, Victoria and South Australia, driving over 20,000 claims worth $1.65 billion so far; November hailstorms in South East Queensland that caused 22,000 claims and $166 million of losses; as well as .A number of these catastrophe loss events are going to see rising totals, in particular the bush fires and the most recent hail storms from January.Those two events alone have driven both IAG and Suncorp to utilise their reinsurance towers for protection, on top of certain claims ceded through quota share reinsurance arrangements.The severe hail storm event saw , that provides it with per-occurrence protection for the recent hailstorm events.

IAG said its gross loss impact from the hail could even surpass A$250 million.In addition, insurer , including its main program, drop-downs and aggregate reinsurance including perhaps its stop-loss.Budgets are now beginning to run down for catastrophe losses at IAG, meaning more will be pushed to its reinsurance partners.Suncorp’s budget is higher, but with the unprecedented start to the season continuing there is every chance its reinsurance claims rise as well.The torrential rains from recent days have helped the fire situation in the New South Wales area, extinguishing a number of bush fires and providing a welcome respite to residents and firefighters.Recent catastrophes have also impacted some insurance-linked securities (ILS) positions, with , while retrocession manager Markel CATCo said the Australian bushfire disaster has caused some capital to be trapped within its listed retrocessional reinsurance investment fund strategy.———————————————————————We’ve tracked more than 650 cat bonds and related ILS transactions since 1996, all of which are included in our extensive .