Big insurance payouts have followed flood damage, but this only covers a small proportion of the cost. Intelligent Insurer finds out more.
Extreme and unpredictable weather has become a lot more frequent in the US. During the period of June 2018 to May 2019, the nation experienced the wettest 12-month period since 1895, causing extensive flood damage. The flooding of the Mississippi river basin alone caused $10 billion of economic losses and $4 billion of insured losses, according to Aon.
Steven Bowen, director and meteorologist at Aon’s Impact Forecasting team, told Intelligent Insurer that the flooding has led to substantial insurance pay-outs. “The US federal crop insurance programme has paid out more than $6 billion for flood damage alone,” he said. Bowen highlighted the US as a unique case in the insurance market in that while it has a mature market with high penetration rates, less than 10 percent of people have flood cover.
“Hurricane Harvey caused $125 billion of damage but only $30 billion of this was covered because most of the damage was flood related. People just don’t realise they need flood cover,” he said.
parametric, catastrophe, global warming, flood risk, Aon, North America, insurance, reinsurance