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Insurers Face Minimum $4B Payout from May U.S. Storm Damage: Aon Benfield Cat Report

Posted on 06 Jun 2013 by Neilson

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Aon Cat reportImpact Forecasting, the catastrophe model development center of excellence at Aon Benfield, today releases the latest edition of its monthly Global Catastrophe Recap report, which reviews the natural disaster perils that occurred worldwide during May 2013. Aon Benfield is the global reinsurance intermediary and capital advisor of Aon plc.

The report reveals that regions of the United States were impacted by several severe windstorm events during the month, including Moore, Oklahoma, where a catastrophic EF-5 tornado killed 24 people, injured 387 others, and damaged or destroyed up to 13,000 homes and structures.

Total economic losses from the event, which comprised at least 61 confirmed tornado touchdowns, were preliminarily estimated at USD5.0 billion, amid insured losses of at least USD2.5 billion.

In a second prolonged severe weather event at least 76 tornadoes touched down, including an EF-5 tornado with 295 mph (475 kph) winds and a U.S.-record 2.6-mile (4.2-kilometer) path width that struck El Reno, Oklahoma. Large hail (including a major hailstorm in Amarillo, Texas that resulted in a USD400 million insured loss), flash flooding in the Plains and Midwest, and damaging winds in the Northeast were also recorded.

Total economic losses are expected to exceed USD2.0 billion, with insured losses above USD1.0 billion.

Two additional stretches of severe weather also affected parts of the Plains and the Southeast, causing a combined economic loss of USD700 million and insured losses of USD375 million.

Steve Jakubowski, President of Impact Forecasting, said: "The month of May is historically the peak of tornado season in the U.S., and after a relatively benign start to the month, tornado activity became much more prevalent during the last two weeks.  Images from the aftermath of the EF-5 tornado in Moore, Oklahoma show the destructive power of the peril and how devastating impacts can be when tornadoes of such magnitude track through densely populated areas. High insurance penetration will help to alleviate the pressure on those affected, and the recovery is already well underway."

Severe weather was also noted in parts of Europe during May, where three tornadoes struck northern Italy's Emilia Romagna region, injuring at least 20 people, and damaging hundreds of homes were damaged in the Bologna and Modena regions. Total economic losses were estimated at EUR10 million (USD13.1 million).

In Russia, an F2 tornado struck the town of Yefremov injuring at least 20 people and resulting in a total economic loss of RUB100 million (USD3.2 million).

Extensive flooding killed at least 11 people in Central Europe, with the most significant damage occurring in the Czech Republic, Germany, Austria, Slovakia, Poland, Hungary and Switzerland. Several major rivers and their tributaries burst their banks, including the Danube, Vltava, and Rhine, as thousands of homes, structures and vehicles were damaged. The event remains ongoing during the first week of June. Total economic losses were anticipated to reach billions of dollars (USD).

Meanwhile, heavy rainfall and strong thunderstorms swept across much of central and southern China during the month, with at least four separate periods of inclement weather were noted.

According to data from the Ministry of Civil Affairs (MCA), 98 people were killed, 171,000 homes damaged or destroyed, as well as 600,000 hectares (1.48 million acres) of crops. Total economic losses were listed at CNY12.3 billion (USD2.0 billion).

Flood events were also recorded in the United States, Canada, Maldives and Uganda.

Significant drought conditions persisted in Brazil, resulting in the country's worst drought since 1963, affecting the northeastern states of Minas Gerias, Pernambuco and Bahia. According to Ministry of National Integration, more than 50% of the region's cattle died and agricultural crops were devastated. The Brazilian government allocated BRL16.6 billion (USD8.3 billion) in aid and recovery.

Drought conditions were also recorded in New Zealand and Panama.

Elsewhere, Tropical Cyclone Mahasen made landfall in Bangladesh, killing 52 people, after causing flooding in parts of Sri Lanka, India, and Myanmar. In Bangladesh, at least 136,132 poorly constructed homes were destroyed by the storm, resulting in economic losses to crops and fisheries listed at BDT15.61 billion (USD200 million).

Hurricane Barbara made landfall in southern Mexico's state of Chiapas, killing at least four people. More than 5,000 homes and other structures were damaged by floodwaters up to 6.0 feet (1.8 meters) in height.

To view the full Impact Forecasting May 2013 Global Catastrophe Recap report, please follow the link below:


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