Private insurers and reinsurers are expected to face financial consequences after several clusters of severe thunderstorms in the United States brought widespread damage to residential and commercial property, vehicles, infrastructure, and agriculture between May 12-15.
At least five people were killed and dozens more were injured during the multi-day outbreak, which inflicted considerable damage to nearly two dozen states.
According to reinsurance broker Aon Benfield’s Impact Forecasting unit, the net financial toll inflicted by the storms is expected to be in the hundreds of millions of dollars, if not higher, with private re/insurers expected to cover a large portion of this, beyond the flash flood-related damage.
The stretch of severe weather was one of the rare major outbreaks within the U.S. this year, according to Impact Forecasting’s May Weekly Catastrophe report. When data from January 1 to May 15 is compared, 2018 has recorded the fewest reports of tornadoes, large hail, and damaging winds since 2004, as shown in the below graphic.
While this does not necessarily indicate a potentiality for lower catastrophe losses in 2018- as there is not always a direct correlation between storm frequency and losses- the two costliest years in the U.S. for the severe convective storm (SCS) peril – 2011 and 2017 – were years with high levels of storm reports, adds the report.
