U.S. Storms in May to Cost Insurers $3B; Economic Costs Total $4B: Aon Report

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Total aggregated economic losses from severe weather in the U.S. during May was set to exceed US$4.0 billion, while public and private insurers face a combined payout approaching an estimated US$3.0 billion, according to Impact Forecasting, Aon Benfield’s catastrophe model development team.

The report described several major outbreaks of severe weather, which swept across central and eastern sections of the U.S. during the month, causing extensive damage through large hail, straight-line winds, tornadoes and isolated flash flooding.

The most prolific event occurred in the greater Denver, Colo.-metro region, where damage from up to softball-sized hail led to insurance payouts of more than US$1.4 billion in the state alone, said Impact Forecasting’s report titled “Global Catastrophe Recap May 2017.”

Significant damage from severe storms was also cited in parts of the Plains, Midwest, Southeast and the Mid-Atlantic, the report added.

Effects of Monsoon Season

Meanwhile, the combination of the arrival of the southwest monsoon and a developing tropical cyclone led to significant rainfall across Sri Lanka, killing at least 213 people, with another 77 people listed as missing and presumed dead, said the report, noting that nearly 150 others were injured.

Flooding and landslides affected 15 of the country’s 25 districts and left more than 22,200 homes damaged or destroyed. Thousands of other structures (including hospitals, schools and religious facilities) were inundated. Total economic losses were preliminarily estimated at US$197 million.

“With the onset of the annual monsoon season for many Asian nations, the events seen in the month of May provided a potential precursor to some of the impacts typically experienced in the region during the months of June, July, and August,” said Claire Darbinyan, associate director and meteorologist, Impact Forecasting.

“As catastrophe models become more prevalent in Asia, the re/insurance industry is better able to provide a clearer understanding of the risks that the flood peril increasingly poses in the region,” she continued. “The opportunity exists for the industry to engage with governments, communities and businesses to share their expertise to help mitigate the effects of such natural disasters.”

The Impact Forecasting report listed additional natural hazard events that occurred elsewhere in the world during May, including:

Cyclone Mora made landfall in Bangladesh, prompting widespread flood and wind damage. Affects were later felt in Myanmar. At least nine people were killed and a combined 50,000 homes and other structures were damaged. Overall aggregated losses were expected to exceed US$100 million.
Powerful thunderstorms led to widespread hail and wind damage in parts of Canada, Russia, China and Bangladesh. Total combined economic losses were well beyond US$100 million.
In Canada, separate bouts of excessive rainfall led to major flooding events in Ontario, Quebec, the Canadian Maritimes and British Columbia, killing at least four people and damaging more than 5,200 homes.
Major flood events affected Brazil, Kenya, Tanzania, and Indonesia.
Multiple regions of the globe dealt with worsening drought conditions. In China, the northern provincial areas of Inner Mongolia, Hebei and Liaoning cited agricultural losses of at least US$122 million. The ongoing drought in South Africa will cost in excess of US$100 million.
Cyclone Donna became the strongest cyclone ever recorded in the Southern Hemisphere during the month of May. The storm tracked through the South Pacific Islands and caused extensive damage in parts of the Vanuatu island chain, New Caledonia and the Solomon Islands.
Separate moderate earthquake events struck Iran (magnitude 5.8) and China (magnitude 5.4), killing 11 people and injuring hundreds more. Thousands of homes collapsed.

Source: Impact Forecasting/Aon Benfield

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