Despite subdued tornado activity in the US during May, thunderstorm activity drove losses with four periods of severe weather resulting in aggregate insured losses estimated at more than $1 billion.
This is according to the latest report by Impact Forecasting, the catastrophe model development centre at Aon Benfield.
The report said that US insurers were thrown a billion dollar curveball with economic losses likely to reach several billion dollars.
The costliest stretch occurred during a five-day period which damaged parts of the Midwest, Plains, Rockies, Mid-Atlantic and the Northeast, including the major metropolitan areas of Chicago and Denver. Despite the losses, by the end of May US tornado activity for the year remained in the bottom 25th percentile of all years dating to the early 1950s.
Steve Bowen, associate director and meteorologist within Aon Benfield’s Impact Forecasting team, said: “While tornado activity in the United States was fairly subdued during the month of May, there was no shortage of vigorous thunderstorm formation across the country. Large hail and damaging winds left considerable damage in many areas, which served as another reminder of how costly non-tornadic storm events can be for the insurance industry and local governments.
“Despite the relatively low activity of the 2014 tornado season, insurers are still faced with several billions of dollars in storm-related damage claims. However, the industry remains well-positioned financially as the focus in the U.S. begins to shift towards the start of the Atlantic hurricane season.”
The heaviest rains in 120 years fell across portions of Southeast Europe during the second half of May, causing extensive flooding in Serbia and Bosnia. At least 80 people were killed, and economic losses were estimated to be near €3.3 billion ($4.5 billion), with significantly lower insured losses due to low penetration rates.
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Impact Forecasting, Aon Benfield, North America, Steve Bowen