Insured Severe Weather Losses in U.S. Already Top $20B for 2021

Annual U.S. severe weather insured losses for 2021 have surpassed $20 billion after a rough October, even before the year is complete, according to a new Aon report.

Multi-billion-dollar natural catastrophe-related insurance losses in the U.S. were caused in part by heavy rainfall along the West coast known as an atmospheric river and a flash flood emergency that left at least four people dead near Birmingham, Alabama.

Also, a late-season severe weather outbreak in the Southern Plains and Midwest generated large hail, damaging winds and tornadoes on Oct. 10-11. Total economic losses were expected to reach at least $300 million, mostly covered by public and private insurers.

“October is typically considered a ‘second season’ for severe weather in the United States as it marks a transition from summer warmth to cooler autumn temperatures,” Brian Kerschner, senior catastrophe analyst for Aon’s Impact Forecasting team, said, noting that this year saw one of the highest tornado tallies for the month on record in what is shaping up to be another year with insured losses exceeding $20 billion.

Heavy weather hits for the month weren’t limited to the U.S. Kerschner said Australia also suffered from sizable October thunderstorm activity causing “an insurance catastrophe for multiple states,” due in large part to large hail.

Internationally, thunderstorms in South Australia, Victoria and Tasmania in late October caused widespread damage, prompting the Insurance Council of Australia (ICAUS) to declare an insurance catastrophe for the event. Total economic and insured losses were each estimated at more than $100 million.

Other natural catastrophe activity that occurred in October included:

• Cyclone Shaheen (Gulab) made landfall in northern Oman on Oct. 3 as a tropical storm in an area that previously had no record of such a landfall dating back to at least 1890, killing at least 14 people in Oman (12) and Iran (two). Total economic losses were expected to be in the hundreds of millions (USD) at a minimum.
• Windstorm Aurore, also known as Hendrik, became the first significant event of the 2021/2022 European windstorm season. Insurers across Europe anticipated tens of thousands of claims with total losses expected to reach into the hundreds of millions (EUR).
• Significant flooding impacted parts of northern China in October, with the heaviest damage registered in Shanxi and Shaanxi. Additional flooding occurred in 14 other provinces. Total economic losses exceeded CNY11.3 billion (USD1.8 billion).
• Widespread monsoonal flooding in Thailand since late September, enhanced by tropical systems Dianmu, Lionrock and Kompasu, continued through the month of October. National authorities noted more than 330,000 homes were damaged or destroyed, along with large swaths of agricultural land.
• The arrival of La Niña resulted in enhanced rainfall during the second rainy season of the year in Colombia, with heavy precipitation affecting the country beginning the last week of October. The three hardest-hit departments included Antioquia, Meta and Putumayo.

The full report is Aon’s Global Catastrophe Recap for October.

Source: Aon

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