The insurance industry and likely some reinsurance capital providers are facing a share of multi-billion dollar losses from severe thunderstorm related catastrophe impacts during the month of April 2021, broker Aon has said.
The biggest event of the month was the severe hail storms that struck three areas, across Oklahoma and Texas, which as we explained before has the potential to drive around $1 billion of losses on its own.
But there were multiple severe thunderstorm and convective weather outbreaks across the United States in April and Aon believes the end result will be a “multi-billion-dollar bill” for the US insurance industry.
The severe weather outbreaks were characterised by large hail, tornadoes and damaging straight-line winds, Aon’s Impact Forecasting unit explained.
These severe storms and convective weather outbreaks caused “considerable damage” to residential and commercial property, automobiles, and agriculture in parts of the Plains, Midwest, Southeast and Northeast, Impact Forecasting’s team explained.
The most significant outbreak occurred between April 27-30, with the major hail storms striking Texas and Oklahoma on April 28.
Hail larger than baseballs sized hit the San Antonio (TX), Fort Worth (TX), and Norman (OK) metro regions causing extensive damage, with economic losses expected to well exceed $1 billion.
Steve Bowen, managing director and head of Catastrophe Insight on the Impact Forecasting team at Aon, commented “Public perception often assumes that tornadoes drive the bulk of annual severe convective storm (SCS) damage costs. The reality is that large hail typically accounts for a majority of thunderstorm-related losses in North America during any given year, and April 2021 was a case in point – the month featured the lowest number of U.S. tornadoes for April since 1992, yet a multi-billion-dollar damage bill is anticipated following extensive hail impacting highly populated areas of Texas and Oklahoma.
“As more population moves into high-risk areas for the SCS peril, it is anticipated that costs associated with hail will only grow in the future.”
The other major weather related catastrophe of the month of April was freezing weather across Europe, which damaged crops and agriculture, in particular in wine growing regions, and is said likely to result in economic costs of EUR 5 billion.