According to insurance and reinsurance broker Aon, hurricane Dorian’s impacts in the United States are only expected to result in insured losses of up to $600 million, while in Japan the broker says typhoon Faxai will cost re/insurers over $5 billion.
September proved a costly month for the insurance and reinsurance industry, but nowhere near the economic impacts of catastrophe events that occurred which rose well into the billions of dollars during the period, according to Aon’s Impact Forecasting unit.
In the United States, Aon expects that hurricane Dorian will cause an economic loss of $1.2 billion. But out of that, the broker said that less than half will fall to public and private sources of insurance and reinsurance capital.
However, Dorian’s impacts in the Bahamas, which fell also into August, were expected to be into the billions, with recovery set to take a significant effort for the islands. Aon said that Dorian will be the costliest event on record for the Bahamas, both on an economic and insured basis.
In the U.S. severe thunderstorms also drove around $240 million of insured losses in September, particularly an outbreak from the Rockies to the Midwest from September 10-12.
In addition, tropical storm Imelda soaked Texas and is expected to drive around $2 billion of economic losses, but insured losses were expected to be much lower.
In Japan, typhoon Faxai was the major event of the month of September, with economic losses from the storm expected to surpass $7 billion and the cost for the insurance and reinsurance industry estimated to be more than $5 billion.
Aon’s estimate is actually at the low-end of the latest industry loss estimate from RMS which suggests a toll for the insurance and reinsurance sector of between $5 billion and $9 billion.
Hence it’s safe to assume the total will rise above the $5 billion mark.
Also in Asia, flooding in India is notable in causing economic losses of over $10 billion, but the insurance industry loss is expected to be much smaller at just a fraction of that amount.
In Europe, flooding in Spain’s southeastern and central areas was the largest catastrophe or weather event of September, resulting in over $2.4 billion of economic losses and an insurance and reinsurance market impact expected to rise above $318 million.
Steve Bowen, Director and Meteorologist in Aon’s Impact Forecasting team, commented, “September is typically one of the most active from a meteorological perspective as it represents the historical peak of tropical cyclone activity in the Northern Hemisphere. Unsurprisingly, this also translates into being one of the costlier months for the insurance industry. The events of 2019 will mark, thus far, the most expensive month for disasters following major cyclone events including Dorian (Bahamas & the U.S.) and Faxai (Japan). While the year overall remains quieter from a loss perspective than 2017 and 2018, it is still imperative to remain cognizant of the weather risks that exist in the fourth quarter.”