The recent outbreaks of severe weather in the U.S., which has featured severe thunderstorms, tornadoes, heavy snow, ice and flooding, will result in economic losses of over $1 billion and take the economic loss total from severe thunderstorms to above average for 2015.
Aon Benfield’s catastrophe risk modelling unit Impact Forecasting reviewed recent catastrophic events which have struck a large swathe of the United States in recent days.
“Given the enormity of the impacts from severe thunderstorms, heavy snow, ice, and flooding across such a broad section of the United States, it is expected that the aggregated economic cost from the storm systems are expected to approach USD1.0 billion,” Impact Forecasting explained.
The losses to the insurance industry, which potentially could hit some reinsurance contracts, are expected to be in the hundreds of millions of dollars. However, Impact Forecasting notes that only a small fraction of flooding losses in the Plains and Midwest will be covered by insurance, as participation in the National Flood Insurance Program (NFIP) is low in many of those states.
2015 has been tracking below average for severe thunderstorm and tornado activity, but Impact Forecasting says that the recent spell of severe weather will take the economic losses just above the long-term average.
The unit explained in a report; “The current stretch of severe thunderstorm losses will push the aggregated 2015 economic loss total above the recent 15-year average (USD16 billion).”
Prior to the 22nd of December 2015, the level of economic losses was at its lowest in the U.S. since 2007 and the same applied to insured losses. The recent spell of weather has elevated the economic loss total to above average for the first time this year.
With severe weather ongoing in the U.S. and many watches in place for anything from flooding, to snowfall, to thunderstorms, to tornadoes, it is likely that the losses will rise from this recent period of weather.
At this stage it will not concern reinsurance or ILS companies that have coverage in place, as any impact to reinsurance layers will likely be slight. Neither will the tornado and severe thunderstorm losses unduly worry any catastrophe bond investors at this time, as exposed cat bonds would require a much heavier financial toll before triggers could be breached.
Details on the severe weather from Impact Forecasting can be found below:
An active six-day weather pattern spawned two powerful storm systems that impacted much of the United States, killing at least 43 people and injuring more than 100 others. The systems, which first materialized in the days leading up to the Christmas holiday, left a trail of damage or had other direct impacts from the Desert Southwest into the Upper Midwest. The stretch was marked by violent tornado touchdowns, large hail, damaging straight-line winds, historic snowfall, rainfall & flooding, freezing rain and ice. States of emergency were declared in Mississippi, Alabama, Missouri, Tennessee, and New Mexico; while local emergencies were declared in individual counties in multiple other states. Based on preliminary storm reports as of 8:00 PM Central Time on December 27 from the Storm Prediction Center (SPC), which was filtered to remove duplicates, there were 365 instances of tornadoes (62), damaging winds (254) and hail (49) from December 22-27.
A fairly complex weather pattern established on December 22 as an area of low pressure began to develop in the Plains while interacting with multiple mid- and upper-level atmospheric features. This set the stage for a very active day on December 23 as the main surface low began to deepen as it tracked from the Plains into the Great Lakes. At the surface, a leading warm front and trailing cold front set the stage for powerful thunderstorms in the Mississippi Valley in what is known as a “triple point” in meteorology – the intersection point between two boundaries. With daytime temperatures exceptionally warmer than average (by 20F+ across much of the Eastern U.S.) and an abundance of moisture surging northward ahead of the leading cold front out of the Gulf of Mexico, surface conditions were highly conducive for explosive thunderstorm development – including supercells. In the mid- and upper- levels, a vigorous trough and an active jet stream only enhanced the risk of an active severe weather day.
Given these conditions, the Storm Prediction Center issued a Moderate Risk of severe thunderstorms for parts of Arkansas, Mississippi, Tennessee, Missouri, Kentucky, and Illinois. This is the fourth-highest level of risk on the new SPC categorical outlook scale. While rare, the SPC issues a Moderate Risk for severe thunderstorms in December approximately once every two years.
As the day unfolded, widespread significant thunderstorms did in fact occur in more than a dozen states. Parts of Mississippi, Tennessee, Arkansas, Illinois and Indiana were the primary tornado touchdown areas; while damaging straight-line winds and large hail were noted from Arkansas to the Ohio Valley. Several of the tornadoes, particularly in Mississippi, were long-track tornadoes that were on the ground for dozens of miles (kilometers) and had vortices wide enough to be considered a “wedge” tornado. Some states recorded up to baseball-sized hail and winds gusting in excess of 75 mph (120 kph).
From December 24-26, the focus shifted from concerns regarding severe thunderstorms to excessive rainfall as the main frontal boundary stalled across the Southeast and lower Mississippi Valley. Major flooding was noted in Alabama as nearly 14.00 inches (356 millimeters) of rain fell in isolated locations.
December 26-30 (Ongoing)
The complex weather pattern persisted as a vigorous upper level area of low pressure began to traverse the Intermountain West into the Four Corners region on December 26. At the surface, an elongated stationary frontal boundary continued to stretch from the Upper Midwest back through the Plains and into the Desert Southwest as a surface low developed. Ahead of the frontal boundary – in what is known as the “warm sector” – very mild temperatures and abundant moisture from the Gulf of Mexico led to significant atmospheric destabilization throughout portions of central/eastern Texas, eastern Oklahoma and western Arkansas. The SPC highlighted these areas as being particularly at risk of explosive thunderstorm development during the afternoon, evening and overnight hours on December 26 into the pre-dawn hours on December 27. These storms occurred immediately along the leading developing cold front, as well as in the form of discrete supercell thunderstorms that were spawned ahead of the main squall line. Additionally, a shield of heavy rainfall fell along the leading warm front that stretched from the Mississippi Valley into the Ohio Valley. Very heavy rains fell on December 26-27 that prompted flash flood watches and warnings to be posted for several states.
As the SPC had forecast, an outbreak of tornadoes impacted parts of Texas on December 26 – including in the greater Dallas, Texas metropolitan region. Multiple fatalities occurred, including in the hardest-hit communities of Rowlett and Garland in Dallas County. Other fatalities from tornadoes were reported in Collin County. Another tornado was reported in Oklahoma. Large hail and winds gusting beyond 100 mph (160 kph) were also noted in the southern Plains as the storm system grew.
By the late evening hours on December 26 into the early morning hours on December 27, another surface area of low pressure began to develop in southern Texas. The rapidly deepening low quickly started to track northeastward through the Plains, Mississippi Valley, Midwest and the Northeast as impacts lingered through December 30. The intensity of the storm system led to cold air sinking southward into New Mexico and Texas as very heavy snowfall and gusty winds led to blizzard conditions. A well-defined rain/snow line given a strong temperature contrast also led to a swath of freezing rain that prompted significant ice accumulation in the Plains and Midwest. Additional rain and snow also fell elsewhere in portions of the Midwest, Ohio Valley and Northeast before the storm is forecast to eventually weaken upon entering Canada on December 30.
A broad section of the Eastern U.S. was directly impacted by the storm system December 23-24. The most severe damage was found in the Mississippi and Ohio Valleys, where nearly 30 confirmed tornadoes touched down. Eighteen people were killed (10 in Mississippi; six in Tennessee; one in Arkansas; one in Alabama) and more than 50 others were injured during the stretch alone. Mississippi incurred the most substantial impacts as many tornadoes ripped across the state. A “Particularly Dangerous Situation” Tornado Watch was issued for the first time since June 2014 as conditions were especially conducive for powerful tornadoes.
One particularly damaging long-track tornado traversed at least 10 counties in Mississippi and Tennessee and completely leveled dozens of homes in the communities of Marks, Sardis, Como, Holly Springs, Ashland and Walnut. The tornado – which NWS meteorologists noted traveled a remarkable 145 miles (233 kilometers) – was preliminarily rated EF3 with 160 mph (260 kph) winds and may be upwardly revised. At its peak, the tornado had a 0.75-mile-wide (1.2-kilometer-wide) base. The Mississippi Emergency Management Agency reported that more than 400 homes were damaged or destroyed statewide by the tornadoes. Additional tornadoes led to even more significant damage to homes and businesses in Illinois, Alabama, Tennessee and Indiana. One particular tornado tracked through the city of Birmingham, Alabama. That twister was rated EF2 with 130 mph (210 kph) winds and damaged or destroyed nearly two-dozen homes. The preliminary breakdown by tornado rating included: EF0 (8); EF1 (11); EF2 (5); EF3 (2).
Beyond tornado-related impacts, the strong thunderstorms prompted damaging straight-line winds gusting to 75 mph (120 kph) in several states in the Midwest that brought down trees and power lines on to homes and vehicles. Tens of thousands of residents were without electricity and holiday travel endured major delays at airports and on the roadways. Up to baseball-sized hail also punctured holes into roofs and shattered windows in parts of Alabama, Missouri, Arkansas, Illinois, Kentucky, Tennessee and Indiana. In Tennessee, the storms caused damage in the counties of Dyer, Hickman, Hardeman Madison, McNairy, Martin, Montgomery, Perry, Sumner, Wayne and Wilson. A state of emergency was declared.
Record rainfall fell in several communities in Alabama and Georgia, where rivers and streams burst their banks and led to dozens of water rescues. Flash flooding damaged some neighborhoods and forced the closure of 190 roads in Alabama. Some parts of Alabama recorded more than a foot (305 millimeters) of rain, including the areas around New Brockton and Ariton. States of emergency were declared by governors in Mississippi and Alabama.
December 26-30 (Current & Ongoing)
The most substantial damage, by far, was incurred in Texas where at least 11 people were killed in tornado-related incidents. The SPC preliminarily noted at least nine tornado touchdowns, with the heaviest damage occurring in the greater Dallas metropolitan region. December 26 was the deadliest day of 2015 for tornadoes.
Catastrophic damage devastated several communities – including parts of Dallas and Collin counties – as supercell thunderstorms spawned violent tornadoes. Initial reports from the community of Garland, a large suburb of Dallas, indicated that a confirmed EF4 tornado with winds up to 200 mph (320 kph) devastated the region. At least 600 homes were damaged or destroyed in Garland alone, with an additional 100 homes impacted to the south in Ellis County from the same twister. Eight people were killed in Garland. The tornado reported ravaged an estimated two-square-mile (5.2-square-kilometer) area to the southwest and the northeast of I-30 and the Bush Turnpike. The separate tornado that devastated the town of Rowlett was preliminarily rated EF3. As many as 600 homes were damaged or destroyed in Rowlett. Another tornado, which left two people dead in the town of Copeville, was rated EF2. NWS meteorologists continue to conduct assessments to determine additional tornado ratings. In total, more than 1,000 homes were damaged by the tornadoes alone in Ellis, Dallas and Collin counties; and more than 52,000 Oncor customers were without electricity at the height of the event. The state of Texas declared disasters for Dallas, Collin, Rockwall and Ellis counties.
Even more severe thunderstorms occurred on December 27 across portions of Oklahoma, Arkansas and Louisiana as the new main area of low pressure continued to intensify while crossing Texas and entered the southern Plains. The entire scope of damage had yet to be revealed, though initial reports suggested varying levels of tornado, wind and hail impacts to structures and vehicles.
Another main component to the storm system was tremendous rainfall and flooding that inundated several states across the Plains and Midwest. The hardest-hit state was Missouri, where at least eight people were killed in several flood-related incidents. Six of the fatalities came in Pulaski County; while two occurred in Greene County. Rainfall totals exceeding 8.00 inches (203 millimeters) were noted in many cities across the state as rivers burst their banks and flooded neighborhoods, farmland and infrastructure. Many roadways were closed in Missouri, including a section of Interstate 70 that runs through St. Louis. A state of emergency was declared. Across the border in Illinois, a family of five was killed after being washed away by floodwaters in the village of Patoka. Major flooding was also a concern in Arkansas, where floods were particularly heavy in northern sections of the state. Flash flood and flood watches were in effect for areas from Texas to Indiana as a broad shield of rain traversed generally north and eastward.
The final component to the massive storm system was winter weather. Historic snowfall was recorded in eastern New Mexico, where a state of emergency was declared. Up to 36 inches (91 centimeters) of snow fell just outside Bonito Lake; while totals in excess of 20 inches (51 centimeters) were noted in the towns of Edgewood, Sedillo, San Antonio, Alto, and Tijeras. The National Guard was deployed to rescue stranded drivers as snowdrifts were several feet (meters) in height. An extended section of Interstate 40 was closed from Albuquerque to the Texas state line as high winds made conditions extremely hazardous to be on the roadways. At least one person died in the state due to exposure to the elements.
As the storm system has continued to evolve, the heavy snowfall has shifted into the Texas Panhandle and elsewhere in the Plains on December 27. Nearly 10 inches (25 centimeters) of snow has already fallen near El Paso, Texas; while accumulations were quickly adding up in Lubbock and Amarillo, TX. In western Oklahoma, 60,000 homes and businesses were without electricity due to snow and wind on December 27. Exceptional snow totals were also forecast by local NWS offices to occur across parts of Kansas, Nebraska, Minnesota, Minnesota and Wisconsin through December 30 before the system dissipates.
Concerns were growing about the prospect of a significant ice storm occurring from the northern Plains through the Great Lakes into Pennsylvania as freezing rain falls in the boundary separating rain and snow. It was expected that the inclement weather would lead to substantial impacts to travel as New Year celebration approaches. Major impacts at both of Chicago’s airports (O’Hare International Airport and Midway International Airport) were expected as the city was forecast to endure significant ice accumulation on December 28.
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