The month of May 2017 has resulted in an insurance and reinsurance industry loss of around $3 billion due to the impacts of severe convective storms, thunderstorms, tornadoes, large hail and associated damaging winds, taking the industry toll for the year-to-date to over $12 billion, according to Impact Forecasting.
Losses from severe thunderstorms and covective weather continue to run above average in 2017, with repeated outbreaks of tornadoes and large hail the main contributors to an escalating insurance industry loss, data from reinsurance broker Aon Benfield’s catastrophe risk modelling and analytics unit Impact Forecasting shows.
Aggregated economic losses from May’s severe weather across the United States will exceed $4 billion, Impact Forecasting said, while the insurance and reinsurance industry faces losses approaching $3 billion. The severe weather activity in May takes the total bill for the re/insurance industry for 2017 to $12 billion.
These totals remain subject to change as further assessments of claims totals are undertaken, so May’s industry loss could rise further.
Leading the impact to re/insurers in May was a $1.4 billion industry impact from a hailstorm in Denver, Colorado, a loss that was seen as the largest ever to hit the state.
Additionally, significan damage was reported from severe convective weather across the Plains, Midwest, Southeast, and the Mid-Atlantic.
The attrition from severe convective weather, thunderstorms, tornadoes and large hail continues in 2017, with an aggregation of losses set to increase the bill for the insurance or reinsurance industry to pay and raising the potential for further hits to any exposed ILS funds, or collateralized reinsurance vehicles.
The run-rate so far shows that 2017 severe convective storm losses are already one of the highest on record for this point of the year, which will certainly translate into further attrition for ILS funds and collateralized reinsurance arrangements, with aggregate deductibles increasingly at risk of erosion.
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