The impacts of numerous outbreaks of severe thunderstorms characterised by large hail and damaging straight-line winds during the month of June is still being tallied, but broker Aon’s Reinsurance Solutions unit estimates that the economic cost will be around $4 billion, with the insurance industry taking more than $3 billion of the bill.
That makes June the most impactful severe weather month so far this year for the insurance and reinsurance industry, with a significant proportion of the loss driven by hail storms that struck the Denver, Colorado region during the month.
We had reported last month about the one significant large hail event in Colorado, where two days of severe storms and large hail impacted the metro area of Denver, Colorado and were expected to drive minimally hundreds of millions of dollars of insurance and reinsurance losses.
Now, the Impact Forecasting team of Aon’s Reinsurance Solutions unit confirm that this event alone is expected to drive roughly $1.1 billion of insured losses from this single outbreak, with other storms also causing bills in the hundreds of millions.
In total, Aon’s team counted eight outbreaks of severe thunderstorms or convective weather that led to widespread storm and flash flood damage across the eastern two-thirds of the United States during June.
Mots of the damage was caused by large hail and damaging straight-line winds across the Rockies, Plains, Midwest, Southeast, and Northeast regions of the country.
Colorado was among the hardest hit, Aon notes, with major hailstorms striking the metro areas of Denver, Boulder, and Colorado Springs.
In total, Aon anticipates economic losses from these severe storm outbreaks will approach $4 billion, while insurance and reinsurance interests could between them pick up over $3 billion of the economic loss.
Artemis’ sources said that a number of ILS fund managers have exposure to the June severe thunderstorms in the United States and collateralized participation on some reinsurance program layers means the capital markets will pay a share of the ultimate bill.
Aon also notes that NOAA’s Storm Prediction Center counted almost 5,000 combined reports of tornadoes, hail, and damaging winds for June, which accounts for 45% of total storm reports recorded during the first six months of 2018, reflecting the severity of the months weather.
Michal Lorinc, Impact Forecasting Catastrophe Insight team analyst, commented, “June was one of the most active months thus far in 2018 for natural disasters. A plethora of major events occurred in many regions around the world during the month – notably in the United States, Japan, China, and Europe – which has led to a multi-billion dollar economic toll. The natural peril risks across these regions are well understood, and Impact Forecasting has many catastrophe models in place to help clients better understand the hazards associated with their portfolio exposures.”
The latest catastrophe report from Impact Forecasting also detailed the Japanese Osaka earthquake, which it says will cause at least a $125 million insured loss.
There were also severe weather events in parts of Western and Central Europe – particularly Germany and France – as well as in Brazil, Canada, India, and China.
Other natural catastrophe events around the world in June 2018 included:
- A large volcanic eruption occurred in Guatemala on June 3, killing at least 122 people and injuring more than 300 others. The eruption of Volcán de Fuego spewed ash and molten rock, leading to states of emergency in the departments of Escuintla, Chimaltenango, and Sacatepéquez.
- Seasonal rainfall and convective storms associated with the Mei-yu frontal system led to further flooding across China’s Yangtze River Basin. China’s National Commission for Disaster Reduction (NCDR) cited aggregated economic losses nearing CNY8.7 billion (USD1.3 billion).
- Further seasonal floods in Asia led to dozens of fatalities and economic damage in the hundreds of millions (USD) in parts of India, Bangladesh, Myanmar, and Vietnam.
- Other floods were noted in Romania, Bulgaria, Ivory Coast, Ghana, Nigeria, and New Zealand.
- Tropical Storm Ewiniar made landfall in China’s Guangdong Province, bringing periods of heavy rainfall and gusty winds. At least 14 people were killed or missing. The NCDR cited total economic losses of at least CNY3.67 billion (USD570 million).
- Drought conditions in China’s Inner Mongolia led to at least USD91 million in agricultural damage.
- Significant wildfires burned across many areas of the Western US at the end of June into July, as hundreds of homes and other structures were destroyed.