US insurance industry faces billion dollar losses
The US insurance industry is set to experience in excess of $1 billion losses from the severe weather that occurred in April with thunderstorms, tornadoes, hail and floods all taking their toll.
The monthly catastrophe report from Impact Forecasting, the catastrophe modelling unit of Aon Benfield, reviewed a number of natural disaster perils that occurred worldwide during April 2014.
A multi-day outbreak of severe weather and flash flooding in the US will likely be the first billion dollar economic loss event of 2014 attributed to convective thunderstorms, said the report.
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 $1 billion, with insured losses minimally in the hundreds of millions of dollars.
Aon Benfield has estimated that the damage from the hailstorm in Denton, Texas may cost insurers more than $650 million. This figure is more than double the initial estimate of $300 million, issued by the Insurance Council of Texas (ICT). The ICT now estimates losses at $500 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 US Storm Prediction Center into its ELEMENTS platform, which is now being utilised by our insurer and reinsurer clients to better gauge their losses across events with lower return periods.”
In China, four separate stretches of severe thunderstorms and heavy rainfall are expected to result in CNY6.2 billion ($1 billion) of economic losses.
Cyclone Ita struck northern Queensland, Australia, bringing estimated economic losses of A$1.1 billion ($1 billion). The Insurance Council of Australia reported 680 claims with payouts estimated at A$8.4 million ($7.9 million).
