Global insurance companies paid USD3 billion for May weather losses

Universal Insurance

Latest data released by Aon Benfield shows that globally, insurance companies paid out more than expected as a result of losses incurred by businesses in the month of May.

The report by Aon Benfield’s catastrophe model development team, evaluates the impact of the natural disaster events that occurred worldwide during May 2017.

The report reveals that several major outbreaks of severe weather swept across central and eastern sections of the United States during the month, causing extensive damage through large hail, straight-line winds, tornadoes and isolated flash flooding.

The most prolific event occurred in the greater Denver, Colorado metro region, where damage from up to softball-sized hail led to insurance payouts of more than USD1.4 billion in the state alone. Significant damage from severe storms was also cited in parts of the Plains, Midwest, Southeast, and the Mid-Atlantic.

Total aggregated economic losses from US severe weather in May was set to exceed USD4.0 billion, while public and private insurers faced a combined payout approaching USD3.0 billion. These totals were subject to change as further assessments were conducted.

Meanwhile, the combination of the arrival of the southwest monsoon and a developing tropical cyclone led to significant rainfall across Sri Lanka, killing at least 213 people, with another 77 people listed as missing and presumed dead. Nearly 150 others were injured.

Flooding and landslides affected 15 of the country’s 25 districts and left more than 22,200 homes damaged or destroyed. Thousands of other structures (including hospitals, schools and religious facilities) were inundated. Total economic losses were preliminarily estimated at USD197 million.

Claire Darbinyan, Impact Forecasting Associate Director and Meteorologist said: “With the onset of the annual monsoon season for many Asian nations, the events seen in the month of May provided a potential precursor to some of the impacts typically experienced in the region during the months of June, July, and August. The early monsoon rains were enhanced over Sri Lanka causing significant property damage and loss of life. As catastrophe models become more prevalent in Asia, the re/insurance industry is better able to provide a clearer understanding of the risks that the flood peril increasingly poses in the region. The opportunity exists for the industry to engage with governments, communities and businesses to share their expertise to help mitigate the effects of such natural disasters.”