The United States has experienced another week where severe convective and thunderstorm weather, as well as flooding is estimated to have caused more than a billion dollars of economic impact, with the insurance and reinsurance industry loss likely another significant to the 2017 toll.
The last week saw what Aon Benfield’s Impact Forecasting terms a “complex weather pattern” that led to severe flooding, convective storms, tornadoes and even blizzard conditions across the United States.
At least 20 lives were lost in this latest round of severe weather, with 70 more injured, as floods impacted the Mississippi River watershed and severe storms struck the Midwest and Mississippi Valley areas.
Big hail, tornadoes and destructive straight line winds were reported from the convective storm component of the weather systems affecting the U.S., with two tornadoes striking the Van Zandt County, Texas area on April 29th causing extensive damage.
The storm systems also brough blizzard conditions to the Rockies, Plains and Upper Midwest, extending the regions affected and the sources of insurance and perhaps reinsurance loss.
“Prolific rainfall” affected the Mississippi area causing rivers within the watershed to reach major flood stage.
Over the four day period, from April 28th to May 1st, 68 tornado reports were received, with over 550 reports of strong winds and around 120 reports of large hail.
Insurance losses from severe weather have been rising steadily in the U.S. in 2017, with tornado activity running above average and insurance or reinsurance losses in the first-quarter of the year alone nearing $6 billion.
This last week has seen further losses occur which will be driving that figure higher now, with the inevitable impacts to insurance and reinsurance interests, as well as the potential for aggregate deductibles on ILS contracts and even catastrophe bonds, that are exposed to severe thunderstorms, to be eroded further.
On the potential scale of the financial loss, Aon Benfield said it is too early to call.
“Given the significant multi-peril footprint across more than one dozen states, it remains too early to provide an exact economic or insured loss estimate at this time. With several rivers and streams additionally forecast to crest in the coming days, it will likely take weeks until the full scope of the event is realized. At a minimum, the total economic impact is expected to reach USD1.0 billion,” Impact Forecasting explained.
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