The record snowfall which affected Japan during the month of February is expected to be largest insurance industry loss event of the month and led total insured catastrophe losses for the month of February 2014 over $1 billion, according to Impact Forecasting.
Impact Forecasting, the catastrophe risk modelling unit of global reinsurance broker Aon Benfield, estimates that the globe suffered insurance industry losses of over $1 billion from natural catastrophe and severe weather events in February. Economic losses of course are much higher, somewhere in the low to mid-single digit billions of dollars, with a significant amount coming from further severe winter weather around the globe.
The Japanese snowstorms are estimated to have caused around $1.2 billion of economic losses and an insurance industry loss of just under $600m. Tokyo suffered the heaviest snowfalls in 45 years and the heavy snow caused widespread residential and commercial damage while also severely disrupting transportation and causing production delays. The agricultural sector was heavily affected as well.
Winter storms and freezing weather in he U.S. in mid-February is estimated by Impact Forecasting to have caused $500m of economic losses and an insured loss of around $250m. Another period of winter storm weather earlier in February is also blamed for economic losses of $250m and an insured loss of $150m.
Meanwhile severe winter weather in China is thought to have caused economic losses in the region of $930m, but no estimate is given for insurance industry losses. Typically insured losses are less than a tenth of the economic loss, or even lower, in China.
In western Europe a number of windstorms affected the region, the most significant of which was Tini which impacted Ireland and the UK. Impact Forecasting estimates that windstorm Tini will result in an insured loss of around $685m, with economic damages expected to reach $1 billion.
Adam Podlaha, Head of Impact Forecasting, commented; “February was characterized by a wide spectrum of events, ranging from well-modelled windstorms affecting vast areas of Europe at the end of its winter season, to largely non-modelled floods affecting parts of South America and Asia. From time to time, a non-modelled peril such as the recent volcanic activity in Indonesia reminds us of the array of risks present around the globe. Increasing exposure in fast growing countries marks the need for future model development and is the major force behind the continually expanding suite of Impact Forecasting models for new territories. In addition, the need to understand relatively well-modelled perils remains high on our list of priorities.”
While the winter weather has been the main worry an early Spring-like weather system in the eastern U.S. spawned reports of 500 tornado touchdowns, damaging winds and hail and is thought to have caused economic losses in the hundreds of millions of dollars.
There will be more insured losses to come from these events as claims are counted, particularly for the severe winter weather in the U.S., Japan and Europe. Another $1 billion plus of insurance industry losses from catastrophes and severe weather is not going to be enough to hit reinsurers, but as these winter losses mount, and are added to the losses from January, they will be featuring in insurers results.
Insurers will be looking nervously at the upcoming U.S. severe thunderstorm, tornado and U.S. hurricane season nervously as the start to the year has not been particularly kind.
The report does not mention the UK flood events.
You can access the full report from Impact Forecasting here (in PDF format).