Reinsurance News

Q3 2017 could be the costliest quarter ever for natural catastrophes: Aon

9th October 2017 - Author: Luke Gallin

The catastrophe risk modelling team of reinsurance broker Aon Benfield, Impact Forecasting, has said that the impacts of catastrophe events during the third-quarter of 2017 will likely make it one of the costliest quarters ever for natural disasters.

Hurricane Harvey over Texas satellite image - from ReutersDuring the month of September, 2017, hurricanes Irma and Maria combined with other tropical storm and wildfire events around the world, as well as powerful earthquakes in Mexico, to drive expected insured losses in the high tens of billions of dollars.

Irma battered parts of the Caribbean before making landfall in the U.S. as a Category 4 storm, the first to hit Florida since hurricane Charley in 2004.

Not long after Irma, and hurricane Maria devastated Dominica, before hitting Puerto Rico as a strong Category 4 storm, with the storm also impacting parts of the Dominican Republic and Haiti.

Mexico was hit by three powerful earthquakes in September, with a Magnitude 8.1 occuring offshore the state of Chiapas, which was followed by a Magnitude 6.2 aftershock. Central Mexico was then hit by a Magnitude 7.1 earthquake, which killed over 360 people.

Impact Forecasting Director and Meteorologist, Steve Bowen, said; “The month of September was exceptionally busy and marked by the most active month on record in the Atlantic Ocean for hurricanes based on combined strength and longevity. The most prolific damage resulted from Hurricane Irma’s impact across the United States and the Caribbean, and Hurricane Maria’s track through the Caribbean. These events were poised to cause a heavy financial burden for federal governments and the insurance industry. Additionally, two major earthquakes and a powerful aftershock in Mexico led to catastrophic damage.

“When combining event impacts from July and August, the third quarter of 2017 is expected to tally as one of the costliest quarters ever registered for natural disasters.”

As highlighted by Bowen, September alone was a costly month for global natural catastrophes, but when combined with the impacts of hurricane Harvey in Texas and other natural disaster events in July and August, it’s clear that Q3 2017 is likely to be one of the costliest on record.

While the overall economic and insured loss totals from the events are expected to take some time to be fully realised, owing to the complexity of losses caused by the hurricanes, some companies have now started to announced loss estimates for Harvey, Irma, Maria and the Mexico earthquakes.

Elsewhere in September, Typhoon Doksuri hit parts of Vietnam, the Philippines, southern China and Laos, driving economic losses of $500 million. Tropical storm Talim damaged parts of Japan in September, while Italy and Croatia experienced flash flooding as a result of a storm system.

Flood events also impacted parts of the Democratic Republic of Congo, Uganda, and also China during the month.

Romania was hit by severe weather outbreaks during the month which claimed the lives of eight people, while windstorm Sebastian hit parts of the UK, the Netherlands, and also Germany.

Parts of the U.S. also felt the impacts of wildfires during the month, reports Impact Forecasting.

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