Reinsurance News

Insured U.S weather losses totalled $3bn in June: Impact Forecasting

12th July 2018 - Author: Matt Sheehan

The severe weather events that affected the eastern two-thirds of the U.S over June 2018 are estimated to have caused around US $4 billion of combined economic damage, $3 billion of which is expected to be covered by re/insurers, according to Impact Forecasting, Aon’s catastrophe risk modeller.

Thunderstorm imageImpact Forecasting’s monthly Global Catastrophe Recap report noted that eight periods of severe thunderstorms led to widespread convective storm and flash flood damage, with the majority of losses produced by large hail and straight-line winds.

Affected areas include the Rockies, Plains, Midwest, Southeast, and Northeast, although Colorado was among the hardest-hit states, where separate major hailstorms struck the metro areas of Denver, Boulder, and Colorado Springs.

There were almost 5,000 combined reports of tornados, hail, and damaging winds in the U.S in June, accounting for around 45% of total storm reports for the first six months of 2018, according to data from the National Oceanic and Atmospheric Administration’s (NOAA) Storm Prediction Center.

Impact Forecasting’s June estimates contrast starkly with Munich Re’s recent analysis of global catastrophes in H1 2018, which noted that total economic losses for the period were at their lowest level since 2005, with insured losses down from 2017.

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The June figures calculated by Impact Forecasting also ranked both economic and insured losses in the U.S as higher than Munich Re’s estimates for total H1 winter losses in North America, which it put at $3.8 billion and $2.7 billion respectively.

Major severe weather events also struck other parts of the world in June 2018, with a magnitude 5.5 earthquake recorded in Japan’s Osaka Prefecture that killed at least four people and injured more than 434 others.

The General Insurance Association of Japan said it had already seen almost 79,000 claims filed with payouts listed at US $125 million, although this figure is expected to rise further.

Michal Lorinc, an analyst within Impact Forecasting’s Catastrophe Insight team, said: “June was one of the most active months thus far in 2018 for natural disasters. A plethora of major events occurred in many regions around the world during the month – notably in the United States, Japan, China, and Europe – which has led to a multi-billion dollar economic toll.

“The natural peril risks across these regions are well understood, and Impact Forecasting has many catastrophe models in place to help clients better understand the hazards associated with their portfolio exposures.”

Elsewhere, a large volcanic eruption killed at least 122 people and injured more than 300 others in Guatemala, while Tropical Storm Ewiniar made landfall in China’s Guangdong province, killing 14 people and causing economic losses in excess of US $570 million.

Flooding also caused around US $1.3 billion of economic losses around China’s Yangtze River Basin, while other areas in Asia, as well as in Romania, Bulgaria, Ivory Coast, Ghana, Nigeria, and New Zealand also experienced their own flooding events.

Additionally, drought conditions led to at least US $91 million in agricultural damage in China’s Inner Mongolia, while significant wildfires burned across many areas of the Western U.S at the end of June and into July, destroying hundreds of homes and other structures.

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