US property insurers and possibly some of their reinsurance providers are facing high-costs from severe storms and convective weather in May, with multi-billion dollar payouts expected by Aon’s Impact Forecasting unit.
The meteorology and modelling unit of the insurance and reinsurance broker said that after May’s weather events, “U.S. insurers face a multi-billion-dollar payout, as convective storms resulted in extensive hail, tornado, wind and flood damage across a series of separate events during the month.”
Of particular note was a severe storm that swept across the Plains, Lower and Middle Mississippi Valley, Southeast and Mid-Atlantic sections of the country from May 3rd to 5th.
Total combined economic losses are expected to exceed $850 million, with the majority of the hail and wind-related damage being covered by insurance
In addition, a series of frontal systems drove widespread severe weather through parts of the Plains, Middle and Lower Mississippi Valley and Southeast from May 6th to 11th, causing large hail impacts, damaging straight-line winds, tornadoes and flooding.
Total economic losses were estimated at up to $350 million for that period, with again insurance likely to take a significant portion of that.
On May 17th, flash flooding struck localities in southeastern Texas and southern Louisiana, while severe storms also generated damaging hail, strong straight-line winds and brief tornadoes.
This period of severe weather and flooding is estimated to have caused $1.1 billion of economic losses, but with a large portion of the damage flood-related, a more significant component will be uninsured, Impact Forecasting explained.
There were three additional severe storms and convective weather outbreaks towards the end of the month, with outbreaks affecting the Plains, Midwest, Rockies, Mid-Atlantic and Northeast.
Each of these three outbreaks was anticipated to result in over $100 million of economic losses, two with losses anticipated to reach into the hundreds of millions and again, insurers will take their share.
India though, experienced the most impactful catastrophes in terms of loss of life during May, with cyclones Takutae and Yaas hitting the country during the month.
The estimated economic cost of the two cyclones is over US $4.2 billion, while close to 220 fatalities were reported.
Michal Lörinc, senior catastrophe analyst for Aon’s Impact Forecasting team, commented on May’s catastrophe activity, “Natural catastrophes continued to bring notable impacts to areas around the world in May, which is often the start of a transition towards tropical cyclone season in the Northern Hemisphere. While most focus is on the Atlantic Ocean, the most activity last month was found in the North Indian Ocean as two cyclones struck the east and west coasts of India in a matter of days.
“Proper planning and evacuations helped minimize the level of casualties, which once again highlights the importance of early warning systems. Such warnings also offer an opportunity to collaborate with the private sector to use tools that help further identify highly vulnerable locations.”