Severe convective weather, including thunderstorms, hail, tornadoes and damaging winds across the United States are expected to drive $2 billion of costs, with the insurance and reinsurance sector to take the majority, according to Aon.
Five major severe weather outbreaks drove the bulk of these costs, with one outbreak across the Rockies and Plains on July 4th and 5th expected to result in an economic impact of at least $730 million, insurance and reinsurance broker Aon’s Impact Forecasting unit explained.
The month of July began on 2nd and 3rd with a meteorological phenomenon dubbed the “Ring of Fire” which affected parts of the U.S. with powerful storms, damaging straight-line winds which gusted to upwards of 80 mph (130 kph) and baseball-sized hail in the Plains, Midwest, and the Northeast, resulting in economic losses expected to be above $100 million.
That was followed by the most costly outbreak on July 4th and 5th, when significant convective storm damage struck areas of Colorado, with up to baseball-sized hail in populated areas near Denver and Fort Collins. Other states, including Wyoming, Nebraska, and South Dakota, were also affected by large hail and non-tornadic wind damage. This outbreak is expected to drive over $730 million of economic losses, with the insurance and reinsurance sector set to take at least $575 million.
The severe weather continued later in the month, with convective weather on 17th and 18th striking the Rockies, Northern Plains, and Upper Midwest. Large hail and damaging winds struck Wyoming and Minnesota and total economic damage was estimated at $260 million, with insurers covering up to $200 million, Aon said.
Next, severe thunderstorms left major storm damage in the Northern Plains, Midwest, and Northeast from July 17th to 23rd, while multiple “derecho” events were recorded in parts of South Dakota, Minnesota, Wisconsin, and Michigan and rare tornadoes struck Cape Cod in Massachusetts. Heavy rainfall also drove some flash flooding. With this outbreak, for which figures are still being calculated, Aon said economic and insured losses would likely exceed $100 million.
Finally, more thunderstorms struck the Upper Midwest from July 26th to 28th, causing widespread damage in parts of Minnesota, South Dakota, Wisconsin, and Michigan. Hail damage incurred in the greater Minneapolis, MN metro region drove much of the losses from these events. The same weather pattern also ignited storms on the 30th and 31st in the Northeast, damaging the Boston, MA metro area. Again, this outbreak is expected to drive economic and insured losses of more than $100 million each.
In total, Aon’s Impact Forecasting expects economic losses from severe thunderstorm related weather in July will exceed $2 billion, with insurance and reinsurance interests set to bear the majority of the cost burden.
Once again, severe convective and thunderstorm weather, especially the resulting hail, has driven a costly month across the United States, with corresponding costs flowing to the insurance industry.
In addition to the costs from severe convective weather, Aon also highlighted hurricane Barry, but noted that the loss to both private and public insurers from that storm is unlikely to reach $300 million.
July’s severe weather costs in the United States followed a costly June.