January Weather Cost Global Economy $4 Billion-Plus: Impact Forecasting

February 10, 2016

January winter weather cost more than $4.0 billion of economic impact in the United States and Asia, according to Impact Forecasting, Aon Benfield’s catastrophe model development team, which evaluates the impact of natural disasters on a monthly basis.

During the same month, El Niño-influenced rainfall events lead to flooding around the globe (with estimated economic losses of more than $125 million), and a magnitude 6.7 earthquake hit India’s Manipur state, costing an estimated $75 million, according to the “Impact Forecasting January 2016 Global Catastrophe Recap.”

Returning to discuss the costs of January weather events, Impact Forecasting said the powerful winter storm that hit the eastern United States during the second half of January, killed 58 people, injured dozens and brought prodigious snowfall, high winds, coastal flooding, freezing rain, ice, sleet, and severe thunderstorms.

States of emergency were declared in 11 states and Washington, D.C. as the event was rated the fourth-largest winter storm in the Northeast and Mid-Atlantic since the 1950s by the National Oceanic and Atmospheric Administration (NOAA).

The total economic losses from this storm were tentatively estimated to exceed $2.0 billion, while insured losses both from private and public entities were projected to reach well into the hundreds of millions, Impact Forecasting said.

Meanwhile, a prolonged period of Arctic cold and snowfall covered much of East Asia, causing significant damage and affecting travel. At least 116 people were killed across Taiwan, Thailand, Japan, South Korea, and China. Total combined economic losses from the event were cited at nearly $2.0 billion, with China incurring 10.6 billion Chinese Yuan ($1.6 billion) of the total cost, Impact Forecasting said.

Adam Podlaha, head of Impact Forecasting, said: “Winter in the Northern Hemisphere was on full display to begin 2016, with several winter storm events impacting parts of the United States, Asia and Europe. Despite winter weather historically not being one of the costliest perils when compared to tropical cyclones or flooding, these winter events can still pose billion-dollar costs to the global economy. The peril continues to be of interest to the insurance industry as claims resulting from heavy snow or ice often quickly accumulate.”

Further natural hazard events to have occurred during January 2016 include:

  • Windstorm Marita, also known locally as Gertrude, which affected areas of the United Kingdom, Ireland and Scandinavia, resulted in total economic and insured losses expected to exceed $100 million.
  • A series of Pacific storm systems fueled by El Niño, which brought heavy rainfall, snow and isolated severe weather to portions of California in early January. Total economic losses were estimated to exceed $125 million, while public and private insurers listed payouts in excess of $65 million.
  • Heavy rains, which affected parts of Brazil and Ecuador, killed at least 12 people and destroyed more than 15,000 homes. Total combined economic losses were in excess of $110 million.
  • A magnitude-6.7 earthquake, which struck northeast India on Jan. 3, killed at least 22 people and injured around 300 others. Total economic losses were beyond 5.0 billion Indian rupee (USD75 million).
  • The Waroona Fire in Western Australia, which killed at least two people and destroyed 180 structures in the hardest-hit communities of Yarloop, Waroona, Hamel, and Cookenup. The Insurance Council of Australia declared cited insured losses minimally at 57 million Australian dollars ($42 million).
  • Drought conditions in South Africa, which caused agricultural damage of around 4.0 billion South African rand ($250 million).

Source: Impact Forecasting

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