Reinsurance News

Cyclone Amphan costs pegged at $13bn in India, Bangladesh

26th May 2020 - Author: Matt Sheehan

Cyclone Amphan, which hit the Indian states of West Bengal and Odisha on May 20th, is expected to cause Rs 1 trillion (US $13 billion) of damage, and Rs 350 crore ($47 million) of insured losses, according to initial estimates.

The cyclone made landfall in coastal areas as a Category 3 storm with winds gusting up to 185km/h (115mph) and waves as high as 15ft.

Areas of Bangladesh were also affected, where officials put the initial loss estimate at 11 billion taka ($130 million), with costs likely to rise further.

Over 1.5 million homes were reportedly damaged or destroyed by Amphan, but deaths remain below 100 due to the large-scale evacuation that preceded landfall.

An estimated 13 million people are thought to have been impacted by the storm, with many losing houses, crops and lands.

In West Bengal alone, 700 villages were flooded and 80,000 people lost their homes, while in Kolkata, the state capital, authorities have struggled to remove debris and clear roads.

With the insured loss estimate expected to rise further, Amphan is likely to be a significant event for the re/insurance industry, with large claims expected in property and motor lines.

Sever flooding and structural damage to the Kolkata international airport could also be a source of major losses, although life insurance claims are expected to remain low.

Adding further complications to the recovery are the COVID-19 restrictions that remain in place throughout India.

Many people have been forced out of work due to the pandemic, and with unemployment at a record high the financial and economic burden will surely be especially severe.

For comparison, Cyclone Fani caused roughly $300 million of insured losses after causing widespread damage to property, vehicle and crops in May 2019.

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