Insured losses hit $7bn in first quarter
While insured losses globally in the first quarter of the year were low, insurers must be prepared for the severity of events that typically hit later in the year, according to Aon Benfield.
Economic losses from 70 worldwide disasters hit $20 billion and insured losses hit some $7 billion in Q1, according to a global review of natural hazards by Impact Forecasting, Aon Benfield’s catastrophe model development centre.
Aon Benfield said that financial losses attributed to these events were “largely negligible” to insurers but warned the bigger losses usually hit later in the year.
Steve Bowen, associate director and meteorologist at Impact Forecasting, said: “Despite the nearly 70 natural disaster events experienced globally during the first quarter of 2014, the financial losses attributed to these events were largely negligible to economies and insurers.
“The preliminary tallies of nearly $20 billion in economic damages and $7 billion in insured losses were both close to the level of losses sustained in 2012 and 2013, but well below those seen in 2010 and 2011. However, while this year's first quarter losses were manageable for insurers, it is worth remembering that the second and third quarters are historically the costliest for the industry as severe thunderstorms, floods, droughts, and tropical cyclone activity become more prevalent.”
In the US, as of March 31, economic damages had reached $5.7 billion, with at least $2.6 billion covered by insurance.
Continuing severe winter weather led to damage and fatalities across the US during March, as multiple storm systems crossed the country. One notable winter storm brought significant snow, sleet, freezing rain accumulations and isolated flooding to the Carolinas and Virginia, leading to total economic damages of around $100 million, and an expected insurance payout above $50 million.
In Washington, a massive mudslide struck, killing at least 33 people and destroying nearly 50 homes. Total economic damages were listed at $10 million.
Europe endured its costliest windstorm season since 2009/10, with insurers expected to pay out more than $4 billion in storm-related claims.
Persistent rainfall, which began in mid-February, continued across parts of South America during the month, as multiple rivers burst their banks and caused flooding in parts of Brazil, Bolivia and Peru. The rains were most pronounced in the Brazilian states of Rondonia (near the border of Bolivia) and Acre (near the border of Peru), where a combined 29,500 families were left homeless. Total economic losses in the region were estimated in excess of $200 million.
Significant floods also occurred in South Africa, causing economic damages listed at $85 million and three separate stretches of severe weather in China caused damages of some $374 million.
