Billion-dollar tornado losses must prompt insurers to better grasp flood risk: Aon
Some 250 tornadoes touched down in the US during April – the most for April since 2011 – a phenomenon that should invigorate insurers to redouble efforts to understand flood risk and further encourage insurance take-up to lower the protection gap, according to Aon.
That was one of the conclusions of Aon’s latest edition of its monthly Global Catastrophe Recap report, which evaluates the impact of the natural disaster events that occurred worldwide during April 2019.
The report revealed that the nearly 250 tornadoes contributed to multi-billion-dollar thunderstorm economic losses. The first of two major tornado outbreaks swept across southern and eastern sections of the US from April 13-15, killing at least nine people and causing widespread damage. Total economic losses were estimated at up to $925 million, with insurers covering approximately $700 million of the cost.
The second major tornado outbreak impacted central and eastern sections of the US between April 17-19, killing at least four people. The outbreak comprised at least 96 tornadoes across a dozen states.
Total economic losses were expected to reach into the hundreds of millions (USD), with a majority of the costs being insured.
Steve Bowen, director and meteorologist within Aon’s Impact Forecasting team, said: “April is often defined by severe convective storms across North America. While thunderstorms produced notable tornado, hail, and non-tornadic wind damage in the United States, there was particular focus on widespread flooding in the US and Canada.
“The multi-billion-dollar uninsured cost of the flood events – including those in the Missouri, Mississippi, St. Lawrence, Ottawa, and Saint John River Basins – has once again exposed the existing protection gap within mature insurance markets for a specific peril. Determining best practice approaches to understand flood risk and further encourage insurance take-up should help lower this gap and minimize the financial burden on affected residents.”
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