Despite experiencing its second-worst cyclone last year, Australia has been “relatively lucky” when it comes to natural catastrophes.

Swiss Re Property Treaty Underwriting Manager ANZ David Sinai believes “we have not seen the worst that Australian cyclones can serve up”.

Mr Sinai has drawn local insights from Swiss Re’s latest Sigma report, called Natural Catastrophes and Man-Made Disasters.

Total global economic losses from natural disasters last year were about $US330 billion ($425 billion), almost double the 10-year average. The US was hit by devastating hurricanes and fires, but in comparison Australia escaped lightly, as it has in other recent years.

“[Cyclones] Larry, Yasi, Marcia and Debbie have all managed to miss the largest population centres in the regions they affected,” Mr Sinai said. “A direct hit on Cairns, Townsville or Mackay would have resulted in much larger insured and economic losses.

“Our model shows a severe cyclone hitting the populated southeast of Queensland, though rare, has the potential to generate losses that are multiples of the losses we have seen since Yasi.”

The same applies to bushfires. The Tubbs fire in California caused almost $10 billion in losses and Mr Sinai believes that could easily be repeated here.

“Locally, Risk Frontiers has estimated there are more than 100,000 homes in Sydney exposed to high bushfire risk, being within 100 metres of the bushland interface,” he said.

“It is entirely plausible that 5-6% of these high-risk homes could be destroyed in a large bushfire event, roughly equalling the impact of the Tubbs fire.

“Swiss Re’s bushfire pricing tool generates losses of up to $7 billion.

“However, in light of the Californian experience, I am starting to think this number could be insufficient for worst-case scenarios.”

See ANALYSIS.