August catastrophes highlight coverage gap

13-09-2021

August catastrophes highlight coverage gap

Steve Bowen, head of catastrophe, Aon

Ida will be among the costliest hurricane to ever hit the US, Aon said on Friday. Economic losses will be in the tens of billions, it estimates.

With 150 mph winds on landfall, Ida is tied as the strongest on record to hit Louisiana. “While a sizeable portion of the economic damage due to coastal and inland flooding was not expected to be insured, public and private insurance entities were still likely to have exposures into the double-digit billions,” Aon stated.

It was the worst of the series of events to hit the US during the month. Others included Hurricane Henri with estimated losses of $550 million; Tropical Storm Fred, causing $1.1 billion of damage; severe weather in the Midwest and Mid-Atlantic resulting in $1.25bn damage across Wisconsin, Illinois, Indiana, Michigan, and Ohio; and fires in California and Washington, costing hundreds of millions of damage.

Wildfires were a common feature across the globe in a month during which Europe recorded a new all-time temperature record of 48.8°C. The temperature recorded in Sicily on August 11 is still to be verified by the World Meteorological Organization. 

Wildfires in Greece at the start of August causing at least $580m of damage were the continent’s costliest event during the month. However, multiple rounds of severe weather in Central Europe from August 12-16 are also likely to cost tens of millions. Flooding in Sweden, meanwhile, will cost upwards of $50m, Aon predicted. 

Elsewhere in the world, the magnitude-7.2 earthquake that struck the Tiburon Peninsula of Haiti on August 14 killed at least 2,207 people and left nearly 140,000 structures damaged or destroyed. Government officials unofficially estimated $3bn in economic damage, with most losses uninsured. In Brazil, the worst drought in 91 years continued, with losses estimated at more than $3bn, while 13 provinces of China were also hit. Drought losses there have now reached $2.25bn for the year.

Steve Bowen, managing director and head of catastrophe insight on Aon’s Impact Forecasting team, said: “As larger-scale disasters occur with more intensity and subsequently result in greater impacts, this has put a spotlight on areas where gaps lie in humanitarian and insurance protection. This is true regardless of whether a country is identified as developed or emerging. 

“Hurricane Ida’s catastrophic impacts in the United States highlighted how much work is yet to be done to better insure around inland and coastal flooding. An even greater gap is found in Haiti following the major earthquake that once again has the country facing a challenging recovery. How governmental bodies work with private sector groups to improve hazard protection and aim to better and more smartly rebuild will be key to lowering future natural peril risk.” 

Aon, Hurricane Ida, Economic Losses, Catastrophe, Floods, Wildfires, Earthquake, Insurance, Reinsurance, Steve Bowen, Global

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