El Nino ‘good news for insurers’
The El Nino weather phenomenon will benefit Australian general insurers, according to a new report from Morgan Stanley.
The financial services giant says any increase in bushfire threat due to the expected warm and dry conditions is more than outweighed by a predicted reduction in tropical cyclones and floods.
Catastrophe losses in El Nino years are expected to be down about 40% compared with La Nina years, and lower rainfall also reduces motor claims, according to the report.
Meanwhile, the Bureau of Meteorology has confirmed last month was the warmest October on record, with maximum temperatures 3.44 degrees above the long-term mean.
This was a record for any month, surpassing the 3.41-degree difference set in September 2013.
Last month’s rainfall was down 53% on the long-term mean.
The bureau says temperatures this month are likely to be warmer than average for southern Australia, with below-average rainfall across the southeast.