The insurance and reinsurance market faced another month of severe weather in the United States in May 2020, with the market set for the third consecutive multi-billion dollar insured loss month this year, according to Impact Forecasting.
Impact Forecasting, the weather, climate and risk modelling unit of insurance and reinsurance broker Aon details the significant impacts of severe weather and convective storms across the U.S. in May in its latest report.
In total, economic losses are expected to rise somewhere above $5 billion for the month, while the insurance and reinsurance market bill is expected to also be in the billions of dollars.
The report warns the market to expect “another monthly multi-billion-dollar insurance bill” for May 2020.
This follows April when 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.
While 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.
“Insurers experienced another costly month,” Aon’s Impact Forecasting team explained of May 2020, with “a significant proportion of the minimum USD4 billion economic cost was covered by insurance.”
Impact Forecasting’s reports details a severe weather outbreak that struck the Plains, Midwest, and Southeast on May 4-5, with impacts being felt the most in parts of Kansas, Arkansas, Missouri, Tennessee, and South Carolina. Most of the damage seen was due to straight-line winds, and total economic losses areestimated above US $975 million, with 75% of the costs expected to be covered by insurance.
Another major outbreak in May saw a significant hailstorm strike San Antonio in Texas, on May 27th, which is also expected to approach or exceed US $1 billion in financial costs, again with the majority likely insured.
In total, Aon’s team classified eight separate severe and convective weather outbreaks during the month, while tropical storm Bertha also impacted the U.S. southeast and mid-Atlantic coasts during May.
U.S. severe and convective weather insurance and reinsurance market losses have now risen to almost US $14.6 billion for the year-to-date, according to Aon’s data, while economic losses are now cited as almost US $20 billion for 2020 so far.