12 March 2021Insurance

US winter weather costliest nat cat for US insurance industry: Aon

Re/insurance broker Aon has estimated that the total direct economic cost of the winter weather conditions that affected the US mid-February will exceed $10 billion.

The estimate considers the cost of damages and net-loss business interruption, according to Aon's catastrophe report. It is said to be the costliest winter weather event for the US insurance industry.

A prolonged stretch of severe weather impacted most of the US from February 12-20. The Polar Vortex generated record-breaking cold temperatures and widespread disruption, which extended as far south as the US/ Mexico border.

Concurrently, a series of low-pressure systems produced rounds of hazardous snow, sleet, freezing rain, ice and severe thunderstorms with impacts spanning from Washington state to the Mid-Atlantic. The storms resulted in power outages for millions, transportation disruptions, extensive property damage (particularly in the Southern Plains due to burst pipes) and impacts to the agricultural sector.

Steve Bowen, director and meteorologist on the Impact Forecasting team at Aon, said: “The unprecedented volume of winter weather impacts tied to the Polar Vortex across the United States in mid-February will result in a prolonged period of loss development, but will certainly end as the costliest insurance industry event for the peril on record.

He added: "Despite being the coldest February for the contiguous US in a generation, it marked only the 19th coldest February dating to the late 1800s."

Bowen warned that as the climate changes such prolonged bouts of cold temperatures are likely to be less frequent, but the intensity of extreme cold events will grow more volatile.

The other natural disaster events that occurred worldwide during February 2021 include a magnitude-7.1 (USGS) earthquake that struck off the coast of Japan’s Fukushima Prefecture on February 13, causing total economic losses of hundreds of millions dollars; tropical cyclone Niran across the coastal areas of Queensland and New South Wales on the eastern coast of Australia from February 25 through March 4; heavy rains and severe flooding in the Brazilian state of Acre; flooding in Southwestern and northern France, as well as in Morocco; and a magnitude-5.4 earthquake in the Kohgiluyeh and Boyer-Ahmad Province of Iran.

Did you get value from this story?  Sign up to our free daily newsletters and get stories like this sent straight to your inbox.

Already registered?

Login to your account

To request a FREE 2-week trial subscription, please signup.
NOTE - this can take up to 48hrs to be approved.

Two Weeks Free Trial

For multi-user price options, or to check if your company has an existing subscription that we can add you to for FREE, please email Elliot Field at efield@newtonmedia.co.uk or Adrian Tapping at atapping@newtonmedia.co.uk

More on this story

20 April 2021   COVID-19 losses mask an underlying improvement in underwriting profitability.
12 May 2021   Cold snap in Europe brings economic damage in excess of €5bn.
11 June 2021   One storm on May 3-5 caused combined economic losses in excess of $850m, most of which was insured.