U.S. Hailstorms that Cost Insurers Billions – and Other April Natural Disasters: Aon

May 12, 2021

Insurers face multi-billion-dollar losses from U.S. hailstorms during April, according to Aon’s Global Catastrophe Recap report, which each month analyzes the impact of natural disaster events worldwide.

The report said severe weather in the U.S. resulted in outbreaks of thunderstorms, driven by large hail, tornadoes and damaging straight-line winds, which caused considerable damage to residential and commercial property, automobiles and agriculture in parts of the Plains, Midwest, Southeast and Northeast.

$1B Insurance Price Tag for U.S. Severe Weather in March (and Other Global Events): Aon

The most significant outbreak occurred from April 27-30, where a particularly damaging sequence of hailstorms affected three heavily populated areas on April 28, said the report, noting that much of the damage was caused by hail larger than baseballs (6.5 inches or 16.5 centimeters). These hailstorms caused extensive damage in the metro regions of San Antonio and Fort Worth in Texas, and Norman, Okla. Total economic losses from these three areas alone were expected to well exceed $1 billion.

For the entire month of April, the U.S. insurance industry was expected to face a multi-billion-dollar bill for thunderstorm-related claims.

“Public perception often assumes that tornadoes drive the bulk of annual severe convective storm (SCS) damage costs. The reality is that large hail typically accounts for a majority of thunderstorm-related losses in North America during any given year…,” said Steve Bowen, managing director and head of Catastrophe Insight on the Impact Forecasting team.

He said April 2021 was a case in point because the month featured the lowest number of U.S. tornadoes for April since 1992. Nevertheless, he added, “a multi-billion-dollar damage bill is anticipated following extensive hail impacting highly populated areas of Texas and Oklahoma.”

“As more population moves into high-risk areas for the SCS peril, it is anticipated that costs associated with hail will only grow in the future,” Bowen said.

European Frost Damage

Elsewhere in the world, the western and central regions of Europe experienced a significant cold spell within the first week of April as numerous locations recorded record lows for the month, with temperatures well below freezing, said the Aon report. Late spring frost caused significant damage to viticulture, fruit trees and other vegetation. Preliminary estimates suggest an economic impact of more than €5 billion ($6.1 billion), most notably in France and Italy.

Other global natural hazard events during the month include:

  • Seasonal flooding (March-June) continued in Colombia throughout the month. According to the National Unit for Disaster Risk Management, the total death toll due to a combination of flooding and landslides increased to 52, while more than 9,300 homes were damaged or destroyed.
  • Flash flooding caused significant damage in Luanda Province of Angola on April 19. According to the Provincial Civil Protection Commission, at least 24 people were killed, while more than 11,000 were displaced. Nearly 2,300 homes were damaged and at least 60 were destroyed, along with 14 affected schools and four healthcare facilities.
  • Cyclone Seroja triggered flash flooding and massive landslides in southeastern Indonesia and Timor-Leste between April 3-5, resulting in at least 272 fatalities. More than 71,000 homes and other structures sustained damage in Indonesia alone. Total economic cost was estimated at $475 million. The storm made landfall in Western Australia on April 11. Official estimates suggested potential reconstruction costs of up to A$200 million ($155 million), while the Insurance Council declared a catastrophe.
  • Heavy rainfall across northern Haiti beginning on April 3 resulted in numerous instances of flooding and flash flooding. The departments of Nord Est, Nord Ouest, and Nord – including the city of Cap Haïtien – were most affected. At least seven deaths were reported, and 2,676 residences were impacted to varying degrees. Additional impacts to cropland and livestock were enhanced by rising rivers and floodwater.

Source: Impact Forecasting/Aon

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