Report says US faces potential $2bn economic loss from major winter storm
February 11, 2016: Impact Forecasting, Aon Benfield’s catastrophe model development team, launched the latest edition of its monthly Global Catastrophe Recap report, which evaluates the impact of the natural disaster events that occurred worldwide during January 2016. Aon Benfield is the global reinsurance intermediary and capital advisor of Aon plc.
The report reveals that a powerful winter storm brought prodigious snowfall, high winds, coastal flooding, freezing rain, ice, sleet, and severe thunderstorms to the Eastern United States during the second half of January, killing 58 people and injuring dozens of others.
States of emergency were declared in 11 states and Washington DC as the event was rated the fourth-largest winter storm in the Northeast and Mid-Atlantic since the 1950s by the National Oceanic and Atmospheric Administration (NOAA).
Total economic losses were tentatively estimated to exceed USD 2 billion, while insured losses both from private and public entities were projected to reach well into the hundreds of millions.
Meanwhile, a prolonged period of Arctic cold and snowfall covered much of East Asia causing significant damage and impacting travel. At least 116 people were killed cross Taiwan, Thailand, Japan, South Korea, and China.
Total combined economic losses from the event were cited at nearly USD 2 billion, with China incurring CNY10.6 billion (USD1.6 billion) of the total cost.
Adam Podlaha, Head of Impact Forecasting, said: “Winter in the Northern Hemisphere was on full display to begin 2016, with several winter storm events impacting parts of the United States, Asia and Europe. Despite winter weather historically not being one of the costliest perils when compared to tropical cyclones or flooding, these winter events can still pose billion-dollar costs to the global economy. The peril continues to be of interest to the insurance industry as claims resulting from heavy snow or ice often quickly accumulate.”
Further natural hazard events to have occurred during January 2016 include:
- Windstorm Marita, also known locally as Gertrude, which impacted areas of the United Kingdom, Ireland and Scandinavia, resulting in total economic and insured losses expected to exceed USD100 million.
- A series of Pacific storm systems fueled by El Niño, which brought heavy rainfall, snow and isolated severe weather to portions of California in early January. Total economic losses were estimated to exceed USD125 million; while public and private insurers listed payouts in excess of USD65 million.
- Heavy rains, which impacted parts of Brazil and Ecuador, killing at least 12 people and destroying more than 15,000 homes. Total combined economic losses were in excess of USD110 million.
- A magnitude-6.7 earthquake, which struck northeast India on January 3, killing at least 22 people and injuring around 300 others. Total economic losses were beyond INR5.0 billion (USD75 million).
- The Waroona Fire in Western Australia, which killed at least two people and destroyed 180 structures in the hardest-hit communities of Yarloop, Waroona, Hamel, and Cookenup. The Insurance Council of Australia declared cited insured losses minimally at AUD57 million (USD42 million).
- Drought conditions in South Africa, which caused agricultural damage of around ZAR4.0 billion (USD250 million).