Reinsurance News

US insurers face multi-billion-dollar bill for April storms: Aon

12th May 2021 - Author: Matt Sheehan

Analysts at re/insurance broker Aon estimate that the US insurance industry faces a multi-billion-dollar bill for thunderstorm-related claims payouts over the month of April.

hailstoneAs we previously reported, Aon expects economic losses of more than $1 billion dollars from just the San Antonio (TX), Fort Worth (TX), and Norman (OK) metro regions following one particularly severe hail event over April 27th to 30th.

But damaging weather conditions were also present over the whole month, with multiple thunderstorm events accompanied by large hail, tornadoes and damaging straight-line winds.

According to Aon, this weather caused considerable damage to residential and commercial property, automobiles, and agriculture in parts of the Plains, Midwest, Southeast and Northeast.

Elsewhere, western and central regions of Europe experienced a significant cold spell within the first week of April as numerous locations recorded record lows for the month, with temperatures well below freezing.

Late spring frost caused significant damage to viticulture, fruit trees and other vegetation, with preliminary estimates suggesting an economic impact of more than €5 billion, most notably in France and Italy.

“Public perception often assumes that tornadoes drive the bulk of annual severe convective storm (SCS) damage costs,” said Steve Bowen, Managing Director and Head of Catastrophe Insight on the Impact Forecasting team at Aon.

“The reality is that large hail typically accounts for a majority of thunderstorm-related losses in North America during any given year, and April 2021 was a case in point – the month featured the lowest number of U.S. tornadoes for April since 1992, yet a multi-billion-dollar damage bill is anticipated following extensive hail impacting highly populated areas of Texas and Oklahoma,” Bowen continued.

“As more population moves into high-risk areas for the SCS peril, it is anticipated that costs associated with hail will only grow in the future.”

Further natural hazard events that occurred worldwide in April included seasonal flooding Colombia throughout the month, which has damaged or destroyed more than 9,300 homes so far, and caused 52 deaths.

Notable flash flooding also caused significant damage in Luanda Province of Angola on April 19, damaging 2,300 homes and destroying at least 60, along with 14 affected schools and four healthcare facilities.

Additionally, Cyclone Seroja triggered flash flooding and massive landslides in southeastern Indonesia and Timor-Leste between April 3-5, damaging more than 71,000 structures in Indonesia alone. Total economic cost was estimated at $475 million.

Finally, heavy rainfall across northern Haiti beginning on April 3 resulted in numerous instances of flooding and flash flooding, with 2,676 residences impacted, as well as damage to cropland and livestock due to rising rivers and floodwater.

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