The Insurance Council of Australia (ICA) is upgrading its catastrophe data to normalise historic disaster loss figures to last year’s values.

Risk Frontiers, which has strong ties to the industry, will oversee the update.

ICA last carried out a loss normalisation update in 2013.

“The normalised loss values assist insurers and reinsurers to more easily estimate portfolio-level losses should historic events repeat themselves,” GM Risk Karl Sullivan told insuranceNEWS.com.au.

For example, the 1999 Sydney hailstorm, which cost the industry $1.7 billion at that time, would carry a different price tag today.

Factors such as bigger populations, more widespread car ownership and different policyholder demographics can affect loss estimates.

“All these factors mean the insured cost of the hailstorm [repeated today] would be significantly higher than it was in 1999,” Mr Sullivan said.

“Having an appreciation for this assists insurers and reinsurers to establish prudentially sound capital arrangements that help them respond quickly and sustainably to catastrophe events.”