Swiss Re Insurance-Linked Fund Management

PCS - Emerging Risks, New Opportunities

Recent tornado outbreak to cost up to $5.5 billion says AIR Worldwide


The tornado and severe thunderstorm outbreak which struck southern and midwestern States in the U.S. between the 22nd to 28th April could cost as much as $5.5 billion in insured losses according to risk modeller AIR Worldwide. This estimate includes damage to residential, commercial and industrial properties and auto losses.

The death toll currently sits around 354 across seven States while thousands have been left homeless due to storm damage. AIR say it is the second deadliest severe thunderstorm outbreak in U.S. history.

AIR Worldwide’s insured loss estimate, of between $3.7 billion to $5.5 billion) is higher than the one EQECAT issued after the event. We still don’t expect any impact to catastrophe bonds from this spell of weather although the damage is contributing to annual aggregate losses for two tranches of cat bond notes issued by Residential Reinsurance in 2008 and 2009. We haven’t heard anything about the Mariah Re Ltd. catastrophe bond which was issued last year. It was the first cat bond to provide cover solely for severe thunderstorm and works on an annual aggregate basis. However it doesn’t cover losses in Mississippi, Virginia or Alabama which were three of the worst affected States according to AIR Worldwide so at the moment we feel it’s unlikely to be impacted.

Q2 is shaping up to be another heavy quarter for insured losses. The flooding in southern U.S. states is the next weather related disaster that the re/insurance industry will need to watch closely as it has the potential to cause large losses. All eyes will certainly be on the Atlantic hurricane season this year.

Artemis Live - ILS and reinsurance video interviews and podcastView all of our Artemis Live video interviews and subscribe to our podcast.

All of our Artemis Live insurance-linked securities (ILS), catastrophe bonds and reinsurance video content and video interviews can be accessed online.

Our Artemis Live podcast can be subscribed to using the typical podcast services providers, including Apple, Google, Spotify and more.

Print Friendly, PDF & Email

Artemis Newsletters and Email Alerts

Receive a regular weekly email newsletter update containing all the top news stories, deals and event information

  • This field is for validation purposes and should be left unchanged.

Receive alert notifications by email for every article from Artemis as it gets published.