Survey: Losses from late April storms could reach $1B

May 8, 2014

Business, Real Estate

Electrical-StormAccording to a report from a global reinsurance firm, the late April storm system that caused widespread damage and fatalities in Mississippi and 19 other states could be the world’s first billion-dollar storm of 2014.

Impact Forecasting, the catastrophe model development center at Chicago-based Aon Benfield, has released the latest edition of its monthly Global Catastrophe Recap report, which reviews the natural disaster perils that occurred worldwide during April 2014.

Aon Benfield is the global reinsurance intermediary and capital advisor of Aon plc (NYSE: AON).

The report reveals that a multi-day outbreak of severe weather and flash flooding in the U.S. will likely be the first billion-dollar economic loss event of 2014 attributed to convective thunderstorms. At least 39 people were killed and 250 injured amid nearly 70 confirmed tornado touch-downs, which occurred across more than 20 states in the Plains, Mississippi Valley, Southeast, Midwest and Mid-Atlantic. Economic losses are set to exceed USD1.0 billion, with insured losses minimally in the hundreds of millions of dollars (USD).

Another U.S. severe weather outbreak led to major damage in parts of the Plains, Midwest and the Mississippi Valley during the month. The most significant damage was attributed to hail, as hailstones the size of softballs struck the Denton, Texas, metro region. Total economic losses were estimated at USD950 million, with insured losses in excess of USD650 million.

Adam Podlaha, head of Impact Forecasting, said, “The recent outbreaks of tornadoes, large hail and damaging straight-line winds in the United States have emphasized the importance of historical data analysis for insurers and reinsurers when trying to forecast future losses. Impact Forecasting has expanded and implemented the past 10 years of observed data from the U.S. Storm Prediction Center into its ELEMENTS platform, which is now being utilized by our insurer and reinsurer clients to better gauge their losses across events with lower return periods.”

Elsewhere, four separate stretches of severe thunderstorms and heavy rainfall affected China. According to data from the Ministry of Civil Affairs (MCA), the events killed nine people and damaged more than 40,000 homes and thousands of hectares of crops. Economic losses were listed at CNY6.2 billion (USD1.0 billion).

Meanwhile, Cyclone Ita made landfall in Australia’s northern Queensland, bringing high winds and heavy rains to mainly rural regions with a low levels of structural exposure. Total economic losses – almost entirely in the agriculture sector – were estimated at up to AUD1.1 billion (USD1.0 billion). The Insurance Council of Australia reported 680 claims with payouts estimated at AUD8.4 million (USD7.9 million).

Torrential rains from a tropical disturbance that would later become Cyclone Ita led to extensive flooding in the Solomon Islands’ capital Honiara. At least 23 people were killed and a state of emergency declared after the rains caused the Matanikau River to burst its banks, affecting more than 50,000 residents.

A powerful magnitude-8.2 earthquake struck off the northern coast of Chile, causing damage and spawning a small tsunami. Seven people were killed and 13,000 homes damaged in the towns of Iquique and Alto Hospicio. Total economic losses were expected to be less than CLP55 billion (USD100 million).

Additional earthquake events occurred in Nicaragua, Mexico, and China during the month.

Torrential rains fell across northern Afghanistan, leading to extensive flash flooding and landslides in 10 provinces. An estimated 2,665 people were killed, including 2,500 in a massive landslide in Badakhshan province. Damage was also noted in the provinces of Jowzjan, Faryab, Sar-e Pol and Baghdis, where 70,000 people were left homeless.

Heavy rains and a melting snowpack led to flooding in parts of Romania, Serbia and Bulgaria, killing at least four people. Each country declared a state of emergency for the hardest-hit districts and municipalities as several rivers overflowed their banks. Damage estimates to infrastructure and property were listed in excess of USD10 million.

A large wildfire impacted multiple neighborhoods in the Chilean city of Valparaiso, killing at least 15 people. A citywide state of emergency was declared as the fire destroyed at least 2,900 homes. Total damage and aid costs were listed at CLP18.7 billion (USD34 million).

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