LowVII Reinsurance & Specialty Risk2 November 2026, Monday
Final loss from the Brisbane storms runs 46% above the first estimate
On 2 November PERILS put the final insured loss from the October 2025 storms on Australia's east coast at AUD 1.62 billion. The figure is about 46% above the initial six-week estimate of AUD 1.108 billion. Queensland accounts for 94% of the loss.
The estimate changed four times in a year. PERILS gave its first figure of AUD 1.108 billion in December 2025 and raised it to AUD 1.512 billion in February 2026. In April it trimmed the number slightly to AUD 1.501 billion, and the final figure came in about 8% above that previous estimate. Property accounts for 87% of the loss and motor for 13%. Queensland took 94%, New South Wales 4.5% and Victoria 1.5%. The worst day was 26 October 2025.
The figure matters for loss development. Severe convective storms, the local storms that produce hail and tornadoes, are a peril prone to underestimation in early estimates. Darryl Pidcock of PERILS said loss development had been more moderate over the past six months. Industry loss indices of this kind are used as triggers in some reinsurance and insurance-linked contracts. The sources make no mention of a catastrophe bond being triggered by this event.
Talay assessment
Bottom line
A final figure 46% above the first estimate shows why convective storm losses remain reinsurers' argument for price discipline. The loss is manageable for the Australian market and will not reverse the softening in Asia-Pacific. Its effect will be to limit any loosening of terms on frequency layers at renewal.
Likely effects
- Australian reinsuranceNegative1–6 months
Losses developing above the estimate give reinsurers grounds to stay reluctant to cut prices on frequency and aggregate covers.
- Model confidenceUncertain6 months+
An estimate revised four times in a year shows the modelling uncertainty of convective storm risk and the need for an additional risk load.
Possibilities, ranked
- 1Softening continues, lower layers resist60%
Prices fall on catastrophe layers while reinsurers hold terms on frequency layers.
Watch: Australian insurers' disclosures on the 1 January and 1 July renewals
- 2A new storm season adds pressure30%
Fresh losses arrive in this summer's storm season and lower-layer prices rise.
Watch: PERILS' first event reports for the 2026–27 season
- 3The loss has no effect10%
Ample capacity fully absorbs the loss and prices fall on the lower layers too.
Watch: Rate changes on Australian frequency layers in renewal reports
Probabilities are calibrated judgement based on the sources, not measurement, and are revised as new information arrives. Not investment advice.
Market reaction
Indicators affected
- Final insured loss▼ AUD 1.62bn
- Versus first estimate▼ +46%