The United States and Canada experienced multi-billion dollar insurance and reinsurance losses from severe weather during the month of June 2020, with hail storms in Calgary and convective weather in the U.S. driving the largest share, according to Impact Forecasting.
Insurance and reinsurance broker Aon’s catastrophe risk modelling and weather analytics unit discusses the impacts of recent severe weather in its latest monthly catastrophe report, with North America again the site of likely well over $2 billion of industry losses.
In Canada, the Calgary hail storm that we discussed recently here, is now expected to be one of the most expensive catastrophe events ever to hit the country.
Aon’s unit believes this event has driven economic losses of roughly US $1.25 billion, a significant proportion of which is likely covered by insurance and perhaps also some reinsurance.
Thousands of homes and vehicles were impacted by the hail storm, while agricultural land was also badly affected.
In the United States, severe and convective weather drove economic losses of more than $2.3 billion in June 2020.
Much of the hail and wind damage will have been covered by insurance and reinsurance, suggesting another high monthly toll for those perils in the U.S.
The most expensive event was a prolonged weather system across June 5-11 that impacted a significant swathe of the eastern two-thirds of the U.S., driving economic losses estimated at $800 million, of which more than $600 million was insured.
A specific hail and wind event in South Dakota on June 4th caused extensive damage, driving economic losses of over $380 million, with three-quarters of the cost covered by insurance, according to Impact Forecasting.
Tropical storm Cristobal drive economic losses of around $325 million, more severe weather from June 2nd to 4th in the Plains, Midwest, and Northeast regions drove economic losses of arund $550 million with much of the cost insured, and further convective weather events drove hundreds of millions of additional costs in the month.
Steve Bowen, director and meteorologist on the Impact Forecasting team at Aon, commented, “The costs associated with the severe convective storm peril continue to account for a higher portion of insurance payouts on an annual basis. While the United States often drives most of these fiscal impacts due to hail, other areas such as Canada, Australia, Germany, and France are frequent to the risk. The June 13 hailstorm in the Calgary metro region, which became one of Canada’s most expensive thunderstorm-related events on record, was not a surprise given Alberta’s long history of impacts from the peril, but the size and intensity of the storm swath over such a concentrated population center only magnified the potential of extensive damage.”
Aon’s data shows the total insurance and reinsurance market hit from the severe weather peril as now approaching $15 billion for the year so far.
March 2020 also saw significant severe convective weather activity, with $2.4 billion of economic losses that could have driven anywhere from $1.5 billion to $2 billion of insurance industry loss as well.
April saw severe convective storms and weather in the U.S. drove hail, tornadoes and straight-line wind damage across a wide swathe of the country that racked up economic losses around $4 billion, with insurance and reinsurance market losses approaching $2.5 billion or so.
May then became the third consecutive multi-billion dollar insured loss month of 2020, as severe and convective weather costs stacked up.