Insurance and reinsurance markets face over $1 billion of losses due to severe weather around the globe in February 2017, according to the latest monthly update from Aon Benfield’s risk modelling unit Impact Forecasting.
As ever, with the continued expansion of insurance-linked securities (ILS) funds into reinsurance and also primary catastrophe exposed insurance markets, the chances of some level of impact to ILS funds or reinsurance sidecar vehicles is almost guaranteed.
A number of severe weather events around the world occurred in February, adding to an expected insurance market loss of in excess of $1 billion.
Impact Forecasting highlight five outbreaks of severe convective or thunderstorm type weather that hit the United States in February, with one of these outbreaks resulting in 60 confirmed tornado touch-downs in the Midwest, Southeast, and Mid-Atlantic.
Illinois, Missouri, Indiana, Arkansas, Kentucky, and Tennessee were among the hardest hit states, as large hail and damaging winds also caused damage to homes, businesses, vehicles, and other structures. Economic and insured losses from this one event are estimated at minimally in the hundreds of millions of dollars (USD), Impact Forecasting said.
European windstorm Thomas is set to be the costliest European windstorm event of the season, the company said, with preliminary insured loss estimates put at above EUR100 million (USD105 million) across both the UK and Germany.
Finally, the powerful thunderstorms and resulting hail that hit regions of New South Wales, Australia, including Sydney, led to widespread damage and disruption.
As we wrote earlier this week, the insurance loss from just IAG and Suncorp has been put at around AU $370 million (US $280 million or higher). This loss is anticipated to grow further as claims are assessed.
Claire Darbinyan, Associate Director and Meteorologist at Impact Forecasting, commented on February’s severe weather activity; “While the United States endured another active and costly month from severe thunderstorms, it was not the only region coping with major losses from the peril. Australian insurers continue to take stock following a major hail event in New South Wales, including the greater Sydney metro region. Given further growth of exposures, hail events will remain a major focus of the insurance industry. Impact Forecasting continues to explore opportunities to model this peril to help clients better understand their risks.”
As we wrote last week, insurance and reinsurance market losses from tornadoes, hail and severe convective weather look set to close in on $2 billion already in 2017. With further outbreaks seen in recent days the eventual toll is likely to rise further, increasing the chances that collateralized reinsurance contracts and sidecar quota-shares take some share.
You can download the monthly catastrophe report from Impact Forecasting here.
Other weather and natural disaster loss events from around the globe in February 2017 included:
- California storm systems killed at least eight people and caused hundreds of millions (USD) in damages. One event saw the evacuation of 200,000 residents as Lake Oroville reached full capacity.
- Two US winter weather outbreaks caused widespread disruption in the Mid-Atlantic and Northeast.
- Major flood events occurred in Peru, Chile, Zimbabwe, Indonesia, and Australia.
- Winter storms in Afghanistan and Pakistan triggered avalanches that killed more than 200 people.
- Cyclone Dineo made landfall in Mozambique, killing at least seven people and injuring 101 others. More than 105,000 homes and 2,000 other buildings were damaged or destroyed while flooding devastated the local agricultural industry. Economic losses were listed at MZN1.2 billion (USD17 million).
- An outbreak of wildfires in Australia’s New South Wales was sparked amid record-breaking heatwave conditions. More than 100 homes and other structures were damaged or destroyed. The Insurance Council of Australia reported that insured losses minimally reached AUD20 million (USD15 million).
- A magnitude-6.5 earthquake struck the southern Philippines killing eight people and injuring hundreds more. Thousands of homes were damaged or destroyed as economic losses were listed at PHP720 million (USD14 million). A further PHP2.0 billion (USD40 million) was made available for repairs.