Cost of global floods in June to exceed $5bn: Aon
The economic cost of floods globally will reach some $5 billion but insurance losses are expected to be low, according to Impact Forecasting, Aon Benfield’s catastrophe model development team, which has released its monthly global catastrophe recap report, which evaluates the impact of the natural disaster events that occurred worldwide during June 2016.
The report found that ‘Mei-Yu’ monsoon rains led to significant flooding across central and southern China throughout the month, killing more than 130 people.
According to China’s Ministry of Civil Affairs, floods in the Yangtze River basin were among the most damaging, resulting in damage to more than 200,000 homes and total aggregated economic losses of over CNY29 billion ($4.4 billion).
Aon said that due to low penetration levels, insurance losses are expected to be relatively low.
The report also found exceptional rainfall in the US state of West Virginia led to catastrophic flooding in several counties, which affected up to 5,500 homes and 125 businesses.
A disaster was declared by the federal government after major damage occurred in Clay, Fayette, Greenbrier, Kanawha, Monroe, Nicholas, Roane, and Summers counties. Total economic losses were anticipated to reach into the hundreds of millions of dollars, while insured losses were expected to be mitigated by the extensive property coverage provided by the US government’s National Flood Insurance Program (NFIP).
Aon also noted that this month featured the lowest number of June US tornadoes since 1988.
Adam Podlaha, global head of Impact Forecasting, said: “With the continued expectation of a transition towards La Niña in the second half of 2016, the month of June provided a potential precursor to some of the global impacts typically experienced during such an ENSO phase.
“The enhanced seasonal monsoon rainfall across China and elsewhere in Asia was amplified as flooding caused considerable property and agricultural damage. With catastrophe models becoming more prevalent in Asia-Pacific, the insurance industry is better able to provide a clearer understanding of the financial risks that the flood peril increasingly poses.”
