May Global Disasters Result in $5B in Claims
Global disasters lead to at least $7 billion in claims as insurers aid the recovery process following May wildfires, floods and storms, according to the latest Impact Forecasting report.
Aon Benfield’s catastrophe model development team released the latest edition of its monthly Global Catastrophe Recap report, which evaluates the impact of the natural disaster events that occurred worldwide during May 2016. Aon Benfield is the global reinsurance intermediary and capital advisor of Aon plc.
A historic wildfire caused catastrophic damage in the Canadian city of Fort McMurray throughout the month of May, becoming the costliest natural disaster in the country’s history. Insured losses – including physical damage and business interruption – are anticipated to be in excess of CAD4.0 billion (USD3.1 billion). The fire charred more than 580,000 hectares (1.43 million acres) of land and destroyed at least 10 percent of Fort McMurray, including more than 2,400 homes and other structures.
“The severity of the wildfire damage in Fort McMurray is an unfortunate reminder of how significant insurable losses can be from the peril. The situation in Canada has already allowed for a strong and cooperative response from both the government and the insurance industry as residents and business owners seek to assess the damage and begin the recovery process. Since this is just the sixth individual global wildfire to surpass the billion-dollar threshold for insurers, there is not a lot of precedent for a fire event of this magnitude,” Adam Podlaha, global head of Impact Forecasting said.
Meanwhile, convective storms and widespread flooding from a storm dubbed ‘Elvira’ swept across parts of northern Europe between late May and early June, killing at least 17 people. The most considerable damage was noted in Germany, France, Austria, Poland and Belgium where floods impacted many major metropolitan regions, including Paris. Insurance industry associations in France (AFA) and Germany (GDV) preliminarily estimated combined minimum claims payouts to exceed EUR2.0 billion (USD2.3 billion). Tentative overall economic damage was estimated to approach EUR4.0 billion (USD4.6 billion).
No fewer than five outbreaks of severe convective storms impacted the United States during May. Parts of the Plains, Midwest, and Mississippi Valley were impacted by damaging tornadoes, straight-line winds, and large hail. Storm-related flooding also caused major damage in portions of Texas during the latter part of the month. Total aggregated insured losses were estimated to exceed USD1.0 billion.
In Asia, Cyclone Roanu brought torrential rainfall to Sri Lanka, eastern India, Bangladesh, Myanmar, and China during May. Widespread flooding and landslides ensued and at least 105 people were killed in Sri Lanka alone. Nearly 125,000 homes and structures were damaged or destroyed across all five countries. The estimated cost of reconstruction was up to LKR250 billion (USD1.7 billion), though insured losses were substantially less given low insurance penetration.
Natural hazard events to occur elsewhere during May include:
Five separate instances of flooding impacted China as aggregated economic losses topped USD1.5 billion. Most of the damage was attributed to agricultural interests.
Other major flood and landslide events in May were reported in parts of Hispaniola, Kenya, Tajikistan, Afghanistan, Rwanda, Ethiopia, India and Yemen.
Tropical Storm Bonnie brought heavy rainfall to portions of the Carolinas and Georgia in the United States at the end of May and into June. Total economic losses were expected to be minimal.
Earthquakes in Ecuador and China caused damages to thousands of homes and a winter weather outbreak in northern China caused damage to crops totaling USD61 million.
Source: Aon Benfield