Guy Carp: California drought is very concerning
As floods continue to ravage the UK, California faces the lowest precipitation in recorded history for the state which has already led to exceptionally severe drought conditions in the area according to Guy Carpenter.
The brokers’ annual catastrophe report, which placed 2013 natural catastrophe insured losses at a record-low of $40 million, also highlighted the increasing drought concern in the US.
“Heading deeper into 2014, we are very concerned about the water situation in the state of California,” said James Waller, research meteorologist for GC Analytics. “In 2013, California experienced the lowest precipitation in recorded history for the state. This has already led to exceptionally severe drought conditions in the area. If these conditions continue to persist, lasting and significant impacts to water resources, agriculture and an aggressive wildfire season will be major areas of concern.”
The report, which analysed disasters by region said that the less than average losses from 2013 will give re/insurers a much needed respite after the above average losses in 2011 and 2012.
Significant events of 2013 included the floods in Europe – especially Germany which was also hit with $3.7 billion of insured losses from hail damage to property and cars, the most costly man-made event which occurred in China after a major fire hit a large microchip factory in September causing an estimated $1.3 billion of insured losses, and $2 billion of flood damage in Canada.
The Oklahoma tornado, which caused insured losses of approximately $1.8 billion and Super Typhoon Haiyan which caused insured losses of $1.5 million were also sizable events.