Aon Benfield have published their Monthly Cat Recap Report for June which is put together by their Impact Forecasting catastrophe modelling and analysis arm. The monthly updates provide a useful review of the events around the globe which will create losses for re/insurers.
After the heavy losses in April and May, mainly due to the outbreaks of tornadoes in the U.S., June has provided some respite as the severe thunderstorm outbreaks haven’t continued to be so devastating and as a result losses during June are estimated to be quite a bit lower than previous months this year.
The disaster which caused the largest economic loss during June was the flooding across at least 13 central and southern Chinese provinces which was triggered by persistent heavy rains. Flooding in China is becoming a larger concern for insurers all the time as the country develops so rapidly and insurance penetration increases. The spell of flooding last month killed 199 people, directly impacted around 37 million people (with over 1.6 million displaced), more than 500,000 homes were damaged or destroyed and hundreds of roads, bridges and railways submerged. Close to one million hectares of farmland were submerged as well. Direct economic losses from this flooding event have been put at $5.41 billion, which is low considering the extent of the damages due to low insurance penetration.
Re/insurers will have to keep an eye on China as insurance penetration creeps up as the country will gradually begin to contribute a much larger proportion of annual global catastrophe losses.
Steve Jakubowski, President of Impact Forecasting, said: “China has once again been struck by severe weather events that have caused widespread damage and economic loss. The country has a highly complex risk landscape, and this year has suffered a series catastrophe events including droughts, severe winter weather, several earthquakes, sandstorms and flooding, which individually and in aggregate have been extremely costly from both an economic and human perspective. We will continue to employ the very latest risk science to help China understand the risks it faces.”
Other events around the world of note during June include; flooding in North Dakota estimated to cause over $200m in damages, tropical storm Arlene making landfall in Mexico, a trio of Asian tropical storms which caused around $342m in damages across China, the Philippines, Korea and Vietnam, two strong aftershocks in New Zealand which have resulted in at 22,000 insurance claims and finally wildfires across the U.S. estimated to cost $500m in lost productivity to Texas alone.