U.S. Storms in March Will Cost Insurers $2 Billion: Aon Benfield’s Cat Report

Insurers face a $2.0 billion bill following seven severe storm events across multiple states in March, according to Impact Forecasting, Aon Benfield’s catastrophe model development team.

Overall economic losses sustained to property, infrastructure and agriculture across the U.S. from these storms and related flood damage are likely to approach $3.5 billion, said Impact Forecasting’s Global Catastrophe Recap – March 2016.

The report reveals that these storms affected nearly every part of the country during the month, as more than 1,000 individual reports of tornadoes, damaging straight-line winds and hail were recorded by the Storm Prediction Center.

The Insurance Council of Texas estimated insured losses for the state alone are above $1.1 billion, following more than 125,000 home and auto claim filings over several weeks, the report said.

Across the Globe

Meanwhile, the most damaging severe thunderstorm and flood event in at least a decade affected the United Arab Emirates (UAE) and Oman in March. UAE local insurers anticipated claims to reach 500 million Arab Emirates Dirham ($140 million), with total economic losses forecast to be well into the hundreds of millions of dollars.

“The March heavy rain and flood event in the Middle East is a reminder of the risks that these types of perils can bring to areas with an arid climate,” said Adam Podlaha, head of Impact Forecasting.

“With increasing exposures in emerging parts of the world, it becomes even more important to expand catastrophe model capabilities into these new territories,” he said.

Natural hazard events that have occurred elsewhere during the month include:

• A Canada winter storm system brought accumulating snow, ice and freezing rain to portions of Ontario and Quebec, causing widespread damage. Total economic losses were estimated to approach 130 million Canadian dollars ($100 million), while insurers anticipated losses well into the tens of millions (of U.S. dollars).
• Thunderstorm and heavy rain events impacted central and eastern sections of China, leading The Ministry of Civil Affairs to report aggregated economic losses of 3.7 billion Chinese Yuan ($570 million).
• Windstorm Jeanne, known locally as Katie caused hurricane-force winds and flooding in northern Europe, killing at least one person. Total economic and insured losses are expected to exceed $100 million.
• Intensifying drought conditions in India caused major crop damage. The National Disaster Relief Fund (NDRF) recently allocated 40 billion Indian Rupees ($600 million) for seven hard-hit states: Tamil Nadu, Rajasthan, Jharkhand, Assam, Andhra Pradesh, Himachal Pradesh, and Nagaland.

Source: Aon Benfield

Topics Carriers USA Windstorm Flood Aon