Re/insurance broker Aon has estimated that the total economic cost of the severe winter weather conditions the affected the US last month will exceed $10 billion.
Aon’s figure considered the economic cost of damages and net-loss business interruption for the period of February 12th to 20th, which will likely be the costliest winter weather event ever for the US re/insurance industry.
During this period, a polar vortex generated record-breaking cold temperatures, which extended as far south as the US / Mexico border.
Concurrently, a series of low-pressure systems produced rounds of hazardous snow, sleet, freezing rain, ice and severe thunderstorms with impacts spanning from Washington state to the Mid- Atlantic.
The storms resulted in power outages for millions, transportation disruptions, extensive property damage (particularly in the Southern Plains due to burst pipes) and impacts to the agricultural sector.
Notably, Aon’s loss estimate is actually quite conservative compares to some catastrophe modellers, such as AIR Worldwide, which has said that re/insurance industry losses alone will likely exceed $10 billion.
“The unprecedented volume of winter weather impacts tied to the Polar Vortex across the United States in mid-February will result in a prolonged period of loss development, but will certainly end as the costliest insurance industry event for the peril on record,” said Steve Bowen, director and meteorologist on the Impact Forecasting team at Aon.”
“Despite being the coldest February for the contiguous U.S. in a generation, it marked only the 19th coldest February dating to the late 1800s. As the climate changes, such prolonged bouts of cold temperatures are likely to be less frequent, but the intensity of extreme cold events will grow more volatile,” Bowen explained.
“The impacts in Texas highlight the importance of infrastructure modernization and improved building code practices to better prepare for more unusual weather behavior in the future.”
Aon’s Global Catastrophe Recap report for February also looked at the magnitude-7.1 earthquake that struck off the coast of Japan’s Fukushima Prefecture on February 13, killing one person and injuring 187 others.
As many as 4,700 residential structures were damaged or destroyed, and total economic losses were expected to reach into the hundreds of millions (USD). The General Insurance Association of Japan (GIAJ) noted that nearly 88,000 insurance claims had already been filed.
Additionally, Tropical Cyclone Niran caused notable wind- and flood-related impacts across the coastal areas of Queensland and New South Wales on the eastern coast of Australia from February 25 through March 4.
Thousands of homes, in addition to other private and public infrastructure, were damaged, and economic losses due to crop damage alone was listed at AU $200 million (US $155 million).
