Reinsurance News

Re/insurers face multi-billion dollar losses from prolonged U.S storms: Aon

7th June 2019 - Author: Matt Sheehan

Re/insured losses are expected to climb into the multi-billion dollar range as severe weather and storm activity in the U.S remained high for a second consecutive month in May, according to the latest Global Catastrophe Recap report from Aon.

TornadoThe broker recorded seven outbreaks of severe convective storms across the central and eastern sections of the country, which was impacted by the most May tornadoes since 2015.

Preliminary local storm report (LSR) data from NOAA also indicates that there were nearly 4,400 individual reports of tornadoes, hail, and straight-line winds – the most in May since 2011.

This follows on from storm activity in April, when almost 250 tornadoes touched down in the U.S, causing in excess of $1 billion of insured losses.

The costliest event last month was an outbreak of severe weather in the eastern two-thirds of the U.S from May 4-10, which resulted in tornado touchdowns, large hail, 100mph winds and flash flooding.

Parts of Texas, Louisiana, Oklahoma, Kansas, and Arkansas were the hardest-hit, with total economic losses expected to come in at $850 million, and public and private re/insurance to cover around $620 million.

Economic losses of nearly $300 million and insured losses of $215 million are also anticipated from a powerful cluster of thunderstorms that swept across parts of North Carolina on May 13, leading to reports of large hail, damaging straight-line winds, and a confirmed EF2 tornado.

On May 16-17, severe storms brought baseball-sized hail and 78mph straight-line winds to parts of Iowa, Illinois and Indiana, causing total economic losses of at least $425 million and insured costs of $325 million, according to Aon.

Additionally, convective storm damage across Louisiana, Nebraska, Arkansas, Kansas, Oklahoma, Missouri, Indiana, Pennsylvania, and New York, as well as heavy tornado activity in Texas, is expected to produce economic and insured losses in the hundred of millions.

“Historically, May has been the most active month for tornadoes in the United States and 2019 was no exception, with the highest May tally since 2015,” commented Steve Bowen, Director and Meteorologist within Aon’s Impact Forecasting team.

“A persistent weather pattern led to several multi-day outbreaks of severe weather that resulted in tornadoes, large hail, damaging straight-line winds, and record-breaking rainfall which had a considerable impact on property and the agricultural sector,” he explained.

“Severe convective storms have resulted in at least USD10 billion in U.S. insurance payouts annually since 2008, and we are likely headed towards a 12th consecutive year.”

Outside the U.S, Aon recorded ongoing drought conditions in China’s Yunnan Province, which are likely to cost $138 million, as well as prolonged rainfall in Paraguay, which has led to widespread evacuations and significant harm to the cattle industry.

Elsewhere, heavy rainfall and flooding impact portions of Southern Europe, the Arabian Peninsula, and Tanzania.

Print Friendly, PDF & Email

Recent Reinsurance News

Getting your daily reinsurance news from Reinsurance News is a simple way to receive only the reinsurance industry news that matters, delivered directly to your email inbox.

  • Only email is mandatory, but the more you tell us about yourself the better we can serve you in future!
  • This field is for validation purposes and should be left unchanged.

By submitting the form you are giving your consent to be emailed by us.

Read previous post:
Athora to acquire VIVAT from Anbang Group, NN Group to take non-life unit

Athora Holding Ltd. is to acquire VIVAT N.V. from Anbang Group Holdings Co Ltd., retaining the life and asset management divisions....