Townsville in the Trough

Two people died and thousands of properties in the North Queensland coastal city of Townsville (pop. ~168,000) have been flooded, following an unprecedented rainfall event for the region, driven by a very active monsoon trough that is refusing to budge and a slow-moving tropical low dragging moist air down from the equator.

According to the Australian Government Bureau of Meteorology (BoM), Townsville has experienced record rainfall, with 1,153 millimeters (45 inches) – equivalent to a year’s worth of rainfall, falling over a seven-day period up to Monday, February 4.

To add to the city’s problems, on Sunday, February 3, the Ross River Dam at the mouth of Lake Ross, just five miles (eight kilometers) from the center of Townsville, reached 247 percent of its typical capacity, and a record-breaking height of 42.99 meters. With the river running through the city, the dam’s flood gates were opened allowing 1,900 cubic meters of water per second to flow downstream in order to prevent catastrophic dam collapse. Local authorities suggested this could have affected up to 2,000 homes in Townsville. More heavy rain is still forecast for the next few days and while the rainfall rate has eased the event is not over yet.

Slow Motion Monsoon

Such monsoon rains in Northern Queensland during the Australian summer are not uncommon with bursts of wet weather caused by warm, moist air from the tropical ocean drawn towards the lower pressure over the hot and dry north of Australia. However, this event is unique for its intensity and length, with the monsoon trough of low pressure causing intense precipitation and remaining stationary over the region for an extended period.

Despite this, the event follows the warmest January on record in Australia and a delayed onset of the monsoon season, suggesting that flooding could have been significantly worse had similar precipitation followed wetter antecedent conditions from a more typical onset of the monsoon.

How the monsoon trough moves will determine how flooding continues to develop. According to the BoM it has been slowly drifting south of Townsville, but it remains uncertain where it will sit over the next few days. With the current wet ground conditions there is a higher likelihood of additional flooding in the region should there be more intense rainfall.

Sid Loses His Crown

The cause of this event differs from Townsville’s previous record rainfall, when ex-Cyclone Sid resulted in 886 millimeters (34.8 inches) of rainfall over seven days in January 1998; a reminder that when considering flood risk all sources of precipitation must be considered. Australia experiences floods from single convective cell flash flooding right through to continental scale monsoons, and the insurance industry has struggled to create a concise definition of flood.

In the past, while flood caused by falling water – the sudden and excessive precipitation in the vicinity of the insured property – was normally covered, flood caused by rising water (the overflowing of rivers, channels or lakes in the vicinity of the insured property resulting from excessive rainfall elsewhere) was not. However, since 2012 all insurers in Australia have used a standard definition for flood that includes water escaping from a dam, and as understanding of the flood hazard has grown, most insurers have made full flood cover available.

Flooding has not been the only hazard with several crocodile sightings across the city as they seek calmer waters in the wake of the floods.

Impact on Insurers

In advance of the event it was suggested up to 20,000 homes could be inundated. Thus far, insurance losses for the Townsville floods in Australia are valued at AUD 124 million (US$88.1 million), from 10,000 claims. However, as residents continue to return home the Insurance Council of Australia (ICA) expects these figures to rise.

Beyond the number of claims several factors will influence the final insured loss for the event. Firstly, insurance penetration. While the majority of home building and contents policies purchased (about 94 percent) include flood, penetration rates in flood prone areas can be quite low with policyholders opting out of flood cover or choosing a policy which does not include it.

Average claims costs are another important factor. A key difference between a flood and other extreme weather events is that it can result in relatively high average claims costs. For example, the average claims cost from the 2010/11 Queensland floods was AUD 45,374 while from Cyclone Yasi it was AUD 15,959 (ICA).

Average claims costs from a flood event are not only a result of the level of flooding but also the vulnerability of the properties impacted. In Townsville, older “Queenslander” style houses are likely to perform better than newer properties, being elevated off the ground and with wooden construction that dries out well. Newer properties in contrast tend to be built slab-on-grade in lower lying areas and constructed with less water-resistant materials.

Additionally, average claims costs from this event may be lower than others. Based on our experience of reconnaissance trips after major floods around the world, summer floods cost less in general than winter, with faster drying of properties meaning reduced additional living expense and business interruption claims. Further, properties in Australia usually lack basements and heating systems which can be drivers of loss in flood events.

As the event continues to develop and claims continue to mount, it is too early to say how losses may develop but the final costs will be a result of a combination of these factors. And with Townsville designated as “Croc Country” – being Crocwise is a way of life here, it will certainly be a relief when the crocodiles return to their homes in the local lakes and rivers.