Zurich-based catastrophe data company Perils has slashed its insured loss estimate for the March NSW and Queensland flooding catastrophe to $751 million, saying initial over-reserving of losses in the wake of the flood event had incorrectly inflated its first two cost estimates.

Perils had estimated just under $1 billion in June and $1.06 billion in May.

Head of Perils Asia-Pacific Darryl Pidcock says it is the first time it has made two consecutive decreases in industry loss numbers.

“This clearly evidences the difficulties associated with setting adequate loss reserves for this kind of event, which represented a mixture of storm drain and river flood losses,” Mr Pidcock said. “All catastrophe events are highly complex, but the complexities associated with flood events are particularly problematic and the March 2021 floods were no exception.”

The losses cover property and motor lines of business, and are based on data collected from most of the Australian insurance market. The total industry loss was made up mostly of personal lines property losses (69%), while commercial lines property losses represented 19% and motor losses 12%.

The March 18-24 disaster affected mainly NSW’s Mid North Coast and the Hunter and Greater Sydney regions, and adjacent parts of southeast Queensland and eastern Victoria were also affected by storm and flood damage.

The extreme period of rainfall resulted in major river and surface water flooding and the peak exceeded historical records.

The event was caused by a blocking high pressure system in the Tasman Sea and a low-pressure system off Australia’s northwest which fed large volumes of moist tropical air into eastern Australia.

Perils will provide an updated estimate in March 2022, a year after the event.