July’s Droughts, Wildfires, Floods Caused Billions in Global Economic Losses: Aon

Many countries across the globe saw worsening in drought-related and wildfire conditions during July, which have led to hundreds of deaths and created a significant financial impact – particularly in the agriculture, forestry, water management and fisheries industries.

This was the assessment of Impact Forecasting, the catastrophe model development team of Aon’s Reinsurance Solutions business, which published its monthly Global Catastrophe Recap report.

Preliminary aggregated estimates of economic losses due to harvest reduction and affected forestry exceeded multiple billions of dollars, the report said.

Northern Europe has experienced one of the deepest droughts on record, contributing to combined losses in excess of US$4.0 billion, the report said, quoting various industry estimates that German farmers alone could face economic losses of €2.5 billion (US$2.9 billion).

Other severe drought events affected agriculture in Australia and Central America, and an extensive heatwave killed more than 150 people in Japan and South Korea, Aon said.

July’s Wildfires

The report discussed the losses brought by wildfires across the globe including:

“The month of July was marked by record-breaking heat, deepening droughts, and destructive wildfires in areas all around the globe,” said Michal Lorinc, an analyst within Impact Forecasting’s Catastrophe Insight team.

“Nearly every major continent recorded some type of peril impact that will lead to a major cost to agricultural interests,” he added.

“In Northern Europe alone, the cost to local farming interests is expected to result in a multi-billion dollar loss in harvest output,” Lorinc affirmed. “All eyes are on the looming possibility of an El Niño return by the end of the year, which could exacerbate these types of impacts.”

The report discussed other natural disasters during the month, including:

Source: Impact Forecasting/Aon’s Reinsurance Solutions