Winter storms and severe weather in March across the United States is likely to drive around $3 billion in economic losses, with two-thirds likely to fall to insurance and reinsurance, translating to an industry loss of roughly $2 billion for the month, according to Impact Forecasting.
The catastrophe risk modelling unit of reinsurance broker Aon Benfield said that March saw a number of winter storm events in the United States, causing extensive travel impacts and widespread damage across numerous states and killing at least 10 people.
Four of the storms became Nor’easters, with heavy snowfall, freezing rain, heavy rain, high winds, and coastal flooding leading to reported damages across the most-affected states of Massachusetts, New York, New Jersey, Pennsylvania, Virginia, and Maryland.
The Nor’easter that struck from March 1st to 3rd spawned hurricane-force wind gusts, heavy snowfall, torrential rain, and coastal flooding along the U.S. East Coast and this storm alone is expected to account for economic losses, including net loss business interruption, of around $2 billion, with insurance and reinsurance interests on the hook for roughly $1.4 billion.
A second coastal winter storm from March 7th to 8th is expected to cause insurance industry losses of $300 million.
Also in March, the first notable severe weather outbreak of 2018 occurred in the U.S., where severe thunderstorms, hail and tornadoes have experienced a quieter start to the year than of late.
This severe weather outbreak included the first EF3 tornado to hit the country for a record 306 days, according to the brokers catastrophe team and this spell of severe convective weather is expected to result in hundreds of millions of insured losses.
Economic losses from the winter storms and severe weather in the U.S. is estimated be as high as $3 billion, with public and private insurers expected to cover roughly two-thirds of the cost, so equating to a $2 billion U.S. weather-related insurance and reinsurance loss for the month.
Also in March, three separate catastrophes were declared in Australia: regional flooding in Queensland; bushfires in New South Wales and Victoria; and Tropical Cyclone Marcus’s impact in the Northern Territory.
Across the three catastrophe events 4,200 claims were filed as of March 21st, and insurance payouts are expected to exceed US $61 million.
Additionally, drought across Uruguay and Argentina is expected to result in economic losses of around $4 billion, although insurance impact will be much lower. $3.4 billion of the economic impact is expected in Argentina, which has been hardest hit, with the rest in Uruguay.
Steve Bowen, Impact Forecasting director and meteorologist, commented, “With an expected multi-billion dollar impact to the agricultural sectors in Argentina and Uruguay alone, this puts additional focus on how costly the drought peril can be and the importance of crop insurance. Lingering La Niña conditions during the austral summer has led to a continued severe lack of rainfall across parts of South America.
“This further signifies the sensitivities of weather patterns surrounding the phase of the El Niño-Southern Oscillation (ENSO), marked by changes in sea surface temperature and wind patterns in the Eastern Pacific Ocean, and how it can influence different types of disaster risk on a global scale.”