Despite the record breaking tornado outbreaks in the United States, the vast majority of the loss activity so far this year has occurred outside of the country. The losses sustained in Australia, New Zealand and Japan have accompanied rate firming in other parts of the property catastrophe reinsurance market, breaking the historical trend of U.S.-based events dictating global pricing movements.
Australia sustained two major losses when floods submerged parts of Brisbane City in January and Cyclone Yasi made landfall in northern Queensland the following month. These events were also strongly influenced by the La Niña event. The floods in Queensland started at the end of 2010, but the worst of the damage occurred in January 2011 when parts of Brisbane City were inundated. Although floodwaters in Brisbane peaked one meter below the level reached during the devastating floods of 1974, thousands of buildings were inundated, and insured losses totaled around USD3 billion. Queensland’s misery was compounded when Cyclone Yasi made landfall on February 3 with sustained winds of around 150 mph, making it one of the strongest cyclones to ever hit Queensland. Although the cities of Cairns and Townsville were spared the worst of the stormy weather, smaller communities suffered severe wind damage while the agricultural sector also reported heavy losses. Estimates suggest Yasi’s insured loss cost is likely to exceed USD1.2 billion.