Severe flooding and thunderstorms across the United States drove an estimated $1.3 billion or more of losses that will fall to insurance and reinsurance interests, according to broker Aon.
March saw flooding take centre stage as the peril drove upwards of $8 billion of economic losses globally, according to the insurance and reinsurance broker.
But the lions share of the insured losses will come from the U.S., where the midwest flooding event devastated a wide area of the country.
The flooding followed heavy snowfall and torrential rain, while other weather effects of the multiple storm system were record temperatures, severe thunderstorms, and hurricane-force synoptic winds. The result was historic river flooding that widely hit the Missouri and Mississippi River Basins.
Aon estimates that total economic losses from this event were above $4 billion, with as much as $1 billion set to fall to insurance and reinsurance interests.
Of course, being a flood event a large share will fall to the National Flood Insurance Program (NFIP), but its losses from the midwest floods fall well short of where its reinsurance program would attach.
Another of the March catastrophe and severe weather events in the U.S. that could trouble re/insurers, was a significant tornado outbreak on March 3rd and 4th, that caused damage across areas of Alabama, Georgia, Florida, and South Carolina. At least 23 people were killed and economic losses are estimated at $190 million, with insurers on the hook for around $140 million, Aon said.
Another winter storm system and outbreak of severe thunderstorms struck the Plains, Midwest, and Southeast on March 8th and 9th, killing at least one person. Damage was largely seen in Texas, Arkansas, Louisiana, Kentucky, and Mississippi from tornadoes, hail, and straight-line winds, resulting in economic and insured losses in the millions.
Severe thunderstorms between March 2rd to 25th brought widespread hail and wind damage to areas of Texas, Oklahoma, and Missouri. Damage was at its worst in the Dallas-Fort Worth metro region, driving economic and insured losses that are both expected to surpass $100 million, Aon said.
Finally, March 27th saw large hail of up to 2.0 inches in Brevard County, Florida, with the majority of damage seen to vehicles and structural roofs/siding. Here, economic losses are expected to top $100 million and Aon notes that most of this will fall to insurers.
A number of Floridian primary insurers have reported losses (including HCI Group, as reported by our sister publication here) from this Brevard County event, however the impact to reinsurance interests is not expected to be significant.
Also of note during the month of March were European windstorms, with Freya expected to drive losses of around $115 million and storm Eberhard expected to become the most costly event of the year so far in Europe, with minimally high hundreds of millions of dollars of insured losses expected.
March looks to have been a relatively costly month, but largely in the United States for reinsurers and any exposed ILS fund interests.
Further afield, the most deadly event was Cyclone Idai which killed over 1,100 people across Southern Africa, with hundreds more remain listed as missing. Economic damage to infrastructure in Mozambique alone was estimated at $1 billion, but with insurance penetration limited in the region there is not expected to be significant support from re/insurers.
Michal Lörinc, Senior Catastrophe Analyst at Aon’s Impact Forecasting, commented on March’s catastrophe activity saying, “The major catastrophe events of March highlighted the continued vulnerabilities which exist in both developed and emerging markets. The multi-billion-dollar impacts from flooding in the United States, Iran, and Cyclone Idai in Southern Africa were each enhanced by infrastructure unable to handle the large scale of water inundation. In an increasingly volatile era for weather events and their impacts on a growing exposure, it will be critical that resilience and risk mitigation planning will become more pronounced in the public and private sectors.”
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