Aon Benfield Cat Report: Deadly Italy Earthquakes Result in $6 Billion Economic Loss

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Posted on 07 Jun 2012

Aon Benfield, the global reinsurance intermediary and capital advisor of Aon plc, today releases the latest edition of its Global Catastrophe Recap report, which reviews the natural disaster perils that occurred worldwide during May.

Published by Impact Forecasting, the firm's catastrophe model development center of excellence, the report reveals that two earthquakes and subsequent aftershocks struck northern Italy within a nine-day period, killing 25 people, injuring more than 400 others and causing extensive damage to the cultural heritage throughout the Emilia-Romagna region of Italy, in addition to businesses and personal property.

An initial, combined economic loss estimate from both tremors stood at EUR5 billion (USD6.25 billion), following significant damage in the provinces of Modena, Ferrara, Reggio Emilia, Rovigo and Mantua.

In Asia, severe and prolonged periods of rain impacted China throughout the month, affecting at least 22 provinces and killing at least 102 people.

According to China's Ministry of Civil Affairs (MCA), at least 143,000 homes were damaged or destroyed during one prolonged event. More than 949,400 hectares (2.34 million acres) of cropland were also affected, contributing to a total economic loss listed at CNY16.88 billion (USD2.68 billion).

Meanwhile, powerful thunderstorms struck eastern Japan, resulting in high winds and tornadoes that killed at least three people, injured 59 others, and damaged more than 1,845 buildings in six separate prefectures.??Steve Jakubowski, President of Impact Forecasting, said: "The Italian earthquakes resulted in the largest natural disaster loss for the country since the L'Aquila earthquake event in 2009. The seismic activity was not unexpected, as

Italy has long been recognised as a region exposed to the possibility of significant earthquake activity. Given the level of insurance coverage in the region, it is anticipated that insured losses would reach minimally into the hundreds of millions of dollars (USD). However, it remains too early to determine how negligible re/insurance losses may be from this event."

In the United States, two periods of severe weather impacted central and eastern sections of the country; the first causing widespread hail and wind damage from the Dakotas to Maryland, resulting in an economic loss estimated at USD275 million, and more than 30,000 insurance claims valued at USD150 million. A secondary severe weather outbreak across the central and eastern U.S. at the end of the month spawned significant damage as well. According to a preliminary report from the South-western Insurance Information Service, insured losses in Oklahoma alone were estimated at USD400 million.

Tropical Storm Beryl made landfall near Jacksonville Beach, Florida at peak intensity with 70 mph (110 kph) winds but did not cause any significant damage, injuries or fatalities.

And wildfires burned in several U.S. states during the month, including the largest fire ever recorded in New Mexico.

Excessive rainfall affected areas of the Canadian provinces of Ontario and Quebec in May. In Thunder Bay, at least 1,100 homes were damaged as well as businesses and infrastructure, and flood damage with a 100-year return period was recorded in Montreal, where personal property and infrastructure were widely affected.

Additional flood events were recorded in Nepal, Afghanistan, Indonesia, Nicaragua, Cuba, Georgia, Brazil and Venezuela.