Economic losses suffered during June from the monsoon season in China led to the largest impact of the month, with almost $4 billion of impact to the Chinese economy, according to Aon Benfield’s Impact Forecasting unit.
Seasonal monsoon rains across China and elsewhere in Asia led to widespread flooding and landslide damage across the region during June, highlighting the continued need for greater insurance and reinsurance penetration in the region.
China was particularly badly hit, with at least 50 people killed and 100,000 homes damaged or destroyed. China’s Ministry of Civil Affairs estimated total aggregate economic losses from the monsoonal rains at almost USD4.0 billion.
Given the low levels of insurance penetration, it’s expected that the $4 billion of economic loss from June would not translate into much of a hit to insurers and possibly no hit at all on the global reinsurance market, further underscoring the opportunity to grow re/insurance coverage in China.
Adam Podlaha, Head of Impact Forecasting, commented; “As the June events highlight, Asia is heavily exposed to monsoonal rains at this time of year. While the region is generally less insured than the major western economies, rapid economic development, population growth and urbanisation are leading to increased insurance penetration, which means that Asia Pacific represents a key area of growth in the global re/insurance marketplace. Impact Forecasting continues to develop catastrophe models that cover many territories and perils in Asia Pacific, which are helping insurers and reinsurers to more confidently underwrite risks in a region that offers them many potential opportunities.”
Monsoonal rain damage was also seen in South Asia and Africa, with damage and fatalities recorded in Bangladesh, India, Myanmar, Nepal, and Côte d’Ivoire. New Zealand’s North Island was also inundated with rain and this resulted in over 2,000 filed claims and an estimated $82m of economic loss.
Meanwhile severe weather across the United States in June is expected to result in at least $500m of insurance industry losses.
Five separate outbreaks of severe weather, thunderstorms and flood events hit the U.S. in June, with straight-line winds, large hail, flash floods, and isolated tornado touchdowns causing damages throughout the Rockies, Plains, Midwest, Northeast, and Southeast regions.
The aggregate June economic losses from severe weather across the U.S. are anticipated to exceed USD1.0 billion, while preliminary estimates of insurance industry losses are pegged at above USD500 million.
Other global natural peril events identified by Impact Forecasting that occurred during June include:
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- Five separate outbreaks of severe weather and flooding impacted the United States, with powerful straight-line winds, large hail, flash floods, and isolated tornado touchdowns prompted damages throughout the Rockies, Plains, Midwest, Northeast, and Southeast. Aggregate June economic losses were anticipated to be well in excess of USD1.0 billion, with preliminary insurance losses estimated at above USD500 million.
- A severe weather outbreak in northern China in mid-June caused significant damage to crops and property. Economic losses of CNY900 million (USD145 million) were reported.
- Heatwave conditions in Pakistan claimed more than 1,240 lives as temperatures soared during the second half of the month, with the majority of the fatalities occurring in Karachi.
- Western Europe endured record heat, with the highest temperatures reported in parts of the UK, Iberia and France.
- Dozens of wildfires broke out across western parts of the U.S. with the most significant damage occurring in the state of Washington. Total economic losses were minimally estimated at USD100 million, while wildfires elsewhere in the U.S. cost local agencies more than USD50 million to fight.
- A USGS-registered magnitude-6.0 earthquake struck eastern Malaysia on June 5, triggering rockslides on Mount Kinabalu that killed at least 19 people. Several properties were damaged and utility supplies were disrupted in some areas.