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US Suffers Widespread Economic/Insurance Impact from Severe Weather in June, According to Aon

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July 13, 2017

Aon Benfield's catastrophe model development team launched the June 2017 edition of its monthly Global Catastrophe Recap report, which evaluates the impact of the natural disaster events (severe weather) that occurred worldwide during June 2017. 

The report reveals that worldwide economic and insured losses during the month were once again largely driven by several major severe weather outbreaks in the United States.

Large hail, tornado touchdowns, straight-line winds, and isolated flash flooding all contributed to an aggregated economic loss that was expected to exceed $3.0 billion. Of that total, public and private insurance entities were expected to minimally cover at least $2.0 billion.

The most significant event (from a financial perspective) occurred on June 11 across parts of the Upper Midwest, where a series of powerful and fast-moving thunderstorms left a trail of damage in Minnesota, Wisconsin, and Michigan.

Among the hardest-hit areas was the Minneapolis-Saint Paul metropolitan region, where substantial wind and hail damage affected homes, businesses, and vehicles. Insurance payouts from this event alone were likely to approach $1.0 billion, while the overall economic cost was estimated at around $1.4 billion.

Other natural peril events to have occurred during the month include the following.

  • Thunderstorm activity in Europe peaked on June 22, when a particularly violent outbreak caused significant losses to German insurers, estimated at EUR400 million (USD455 million).
  • Torrential monsoonal rainfall caused devastating floods and landslides in Bangladesh and neighboring northeast India, causing at least 169 fatalities.
  • Other flood-related events in Asia (including China, Taiwan, Indonesia, Bangladesh, and India) resulted in a combined death toll of at least 312 people.
  • Additional significant floods occurred in Central America, Chile, and Western Africa.
  • Strong thunderstorms affected Western Cape in South Africa, where the region was previously suffering from severe drought. However, the greatest damage cost occurred after lightning strikes prompted several catastrophic fires. Published reports indicated that the local insurance industry could face payouts approaching ZAR4.0 billion (USD305 million); one of the costliest events in the region's history.
  • The combination of extreme heat and dry thunderstorms led to one of the deadliest wildfires in Portuguese history, killing 64 people and destroying hundreds of homes and businesses. The local government indicated that economic losses may reach EUR497 million (USD565 million).
  • Two tropical storms made separate landfalls in North America: Beatriz, in the Mexican state of Oaxaca, and Cindy, in the US Southeast. Damage costs from each event were largely negligible.
  • An offshore magnitude-6.3 earthquake damaged more than 1,100 homes on the Greek island of Lesbos.

For the results from Aon’s May report, read the Captive.com article "Aon Catastrophe Report Reveals Severe Weather Hit US Economy."

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