10 February 2016 Insurance

January natural disasters cause billion-dollar damages worldwide

A severe winter storm that hit the Eastern US during the second half of January has resulted in economic losses of $2 billion, and insured losses well into the hundreds of millions, according to Impact Forecasting, Aon Benfield’s catastrophe model development unit.

According to the firm’s Global Catastrophe Recap report, which evaluated the impact of the natural disaster events occurring worldwide in January 2016, the powerful storm brought prodigious snowfall, high winds, coastal flooding, freezing rain, ice, sleet, and severe thunderstorms to the area killing 58 people and injuring dozens of others.

States of emergency were declared in 11 states and Washington, DC, as the event was rated the fourth-largest winter storm in the Northeast and Mid-Atlantic since the 1950s by the National Oceanic and Atmospheric Administration (NOAA).

A prolonged period of Arctic cold and snowfall in East Asia also caused combined economic losses of nearly $2 billion, according to the report. At least 116 people were killed across Taiwan, Thailand, Japan, South Korea, and China.

Further natural hazard events to have occurred during January 2016 include:  Windstorm Marita, also known locally as Gertrude, which impacted areas of the UK, Ireland and Scandinavia, resulting in total economic and insured losses expected to exceed $100 million; as well as a series of Pacific storm systems fuelled by El Niño, which brought heavy rainfall, snow and isolated severe weather to portions of California in early January.

Total economic losses were estimated to exceed $125 million; while public and private insurers listed payouts in excess of $65 million.

Heavy rains, which impacted parts of Brazil and Ecuador, also killed at least 12 people and destroyed more than 15,000 homes. Total combined economic losses were in excess of $110 million.

A magnitude-6.7 earthquake, which struck northeast India on January 3, killed at least 22 people and injured around 300 others. Total economic losses were beyond INR5 billion ($75 million).

The Waroona Fire in Western Australia, killed at least two people and destroyed 180 structures in the hardest-hit communities of Yarloop, Waroona, Hamel, and Cookenup. The Insurance Council of Australia declared cited insured losses minimally at AUD57 million ($42 million).

Drought conditions in South Africa, also caused agricultural damage of around ZAR4 billion ($250 million), according to Aon Benfield.

Adam Podlaha, head of Impact Forecasting, said: “Winter in the Northern Hemisphere was on full display to begin 2016, with several winter storm events impacting parts of the United States, Asia and Europe.

“Despite winter weather historically not being one of the costliest perils when compared to tropical cyclones or flooding, these winter events can still pose billion-dollar costs to the global economy.

“The peril continues to be of interest to the insurance industry as claims resulting from heavy snow or ice often quickly accumulate.”

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