Catastrophes highlight need for model development
The increasing severity and frequency of losses in some fast-growing countries highlight the need for further investment by the insurance industry in developing risk models for some of these regions.
This is one of a number of observations made by the catastrophe unit at Aon Benfield which has released its monthly global catastrophe recap report.
Adam Podlaha, head of Impact Forecasting, said: “February was characterized by a wide spectrum of events, ranging from well-modelled windstorms affecting vast areas of Europe at the end of its winter season, to largely non-modelled floods affecting parts of South America and Asia.
“From time to time, a non-modelled peril such as the recent volcanic activity in Indonesia reminds us of the array of risks present around the globe. Increasing exposure in fast growing countries marks the need for future model development and is the major force behind the continually expanding suite of Impact Forecasting models for new territories. In addition, the need to understand relatively well-modelled perils remains high on our list of priorities.”
Japan’s snowstorms raised the winter weather insurance pay-outs of February to more than $1 billion globally, according to the report.
The report reveals that regions of Japan experienced record snowfall during the month, which killed 37 people and injured more than 2,750 others, mostly as a result of traffic-related accidents.
Insurers forecast total claims pay-outs of around ¥60 billion ($585 million), while economic losses were estimated to approach ¥120 billion ($1.2 billion).
In the US a strong winter storm crossed the country mid-month, killing at least 25 people and damaging more than 50,000 structures. Total economic losses were estimated at $500 million, while insurers cited losses in excess of $250 million.
Earlier in February, a separate winter storm killed at least nine people across the eastern US, generating total economic losses of around $250 million and insurance losses above $150 million.
Severe winter weather in China killed at least 10 people and damaged or destroyed nearly 35,000 structures, according to data from the Ministry of Civil Affairs. Total economic losses were estimated at ¥5.7 billion ($930 million).
In western and central Europe, Windstorms Nadja, Petra, Tini, and Ulla all brought high winds and heavy rains during February. The most significant event was Windstorm Tini, which caused extensive damage across Ireland and the United Kingdom. The storm prompted winds in excess of 160 kph (100 mph) as well as flooding across England, Wales and Ireland. Total insured losses were estimated at €500 million ($685 million), with overall economic damages forecast at €730 million ($1 billion).
Mount Kelud erupted on Indonesia’s Java Island, killing at least seven people and resulting in the evacuation of 200,000 local residents. Economic damages were estimated at Rp2 trillion ($103 million).
Flooding continued to inundate much of Bolivia during February, killing 46 people over a two-month period. Total economic damages across multiple regions were listed in excess of Bs690 million ($100 million).