Reinsurance News

Aon tallies cost of August storms

11th September 2020 - Author: Matt Sheehan

Re/insurance broker Aon has estimated that the combined cost of the nine tropical cyclones that made landfall around the globe in August will be nearly $20 billion.

florida-stormThe most significant event during the month was Hurricane Laura, which made landfall as a high-end Category 4 storm in Louisiana with sustained over-water wind speeds of 150 mph (240 kph).

Catastrophic impacts were incurred across swaths of the Louisiana, particularly in Cameron and Calcasieu Parishes due to wind gusts topping 100 mph (160 kph), storm surge, and inland flooding.

Total economic losses are minimally listed at $10 billion, but likely even higher, and the portion covered by public and private insurance entities is also expected to result in a notable multi-billion-dollar payout.

Hurricane Isaias also touched down in North Carolina earlier in the month as Category 1 storm with 85 mph (140 kph) winds, having first tracked through the Caribbean.

Hurricane-force wind gusts along with several feet (meters) of storm surge were reported along the eastern seaboard from the Carolinas into New England and Isaias spawned at least 39 confirmed tornadoes.

Aon estimates total economic losses from Isaias in the US to be around $5 billion, of which slightly more than half is thought to be insured.

The broker also recorded several days of severe weather across eastern parts of the US from August 8th to 12th, including impactful hail events in South Dakota and Minnesota.

The worst damage resulted from a derecho event that hit Iowa and Illinois on August 10, brining peak straight-line wind gusts of 140 mph (220 kph) and considerable impacts to property, vehicles, the electrical grid, and agribusiness.

Total economic losses were estimated at $6.5 billion and insurance is expected to cover more than half of the total. Around $5 billion of this figure is attributable to the derecho event alone.

Severe weather in the central and northern Plains and the Upper Mississippi Valley between August 13th and 17th also brought damaging hail, isolated tornadoes, straight-line winds, and heavy rainfall, driving further losses of $400 million, with at least $300 million covered by insurance.

In Florida, severe storms produced damaging straight-line winds, flooding rains, severe hail, and two confirmed tornadoes, which are anticipated to cause economic and insured losses into the millions (USD).

Hurricane Marco also made landfall as a minimal tropical storm near the mouth of the Mississippi River in eastern Louisiana on August 24th, although damage was minimal and estimated in the low-digit millions.

Additional economic and insured costs of at least $100 million were caused by multiple rounds of severe storms across the Northern US in late August, and a further $100 million could be driven by severe thunderstorms across southern Plains, particularly in the Texas Panhandle and Red River Valley.

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