Insurers Face $1B Payout From February Storms

March 10, 2015

February storms in the U.S. are expected to cost insurers more than $1 billion, according to the latest Global Catastrophe Recap from Aon Benfield’s Impact Forecasting.

Five separate storm systems hit the U.S. during the month, bringing heavy snow, frigid cold, freezing rain and ice. The storms resulted in 72 deaths and transportation disruption and business closures in major metropolitan areas.

Early estimates suggest economic losses from the storms will be in the low billions, the report said, with insured losses likely to exceed $1 billion.

Two of the storms belted northeastern parts of the United States during the month, including one that brought record snowfall to parts of the Northeast. In Massachusetts, some locations reported up to 36.0 inches (91.4 centimeters) of snow, while major cities in the region were brought to a virtual standstill as transit systems were closed. Aon Benfield estimates the total economic damage and losses (including business interruption) from these Northeast storms to be at least $500 million.

Forecasters are watching to see what happens next.

“As we begin to transition to the start of the severe weather season, it will be interesting to see if a cooler pattern lingers into the spring months. Should such a scenario occur, it is entirely possible that U.S. tornado totals could remain at historically low levels for a fourth consecutive year,” said Steve Bowen, Impact Forecasting senior scientist and meteorologist.

Global Weather Events

In Europe, 19 people died from snow storms that resulted in power outages and transport disruptions, as well as avalanches in the Swiss Alps and Pyrenees. Low pressure system Mischka brought heavy rain and strong winds to the eastern part of the continent, leaving 13 people dead and flooding thousands of properties as several major rivers in the Balkan Peninsula overflowed their banks.

In Asia, a series of avalanches in Afghanistan claimed at least 286 lives and destroyed 1,250 homes, with some of the slides wiping out entire villages, according to the report. A magnitude 5.2 earthquake struck China’s Xinjiang Uygur Autonomous Region on Feb. 22, damaging at least 3,000 homes and causing economic losses in excess of $15 million.

Cyclones Lam and Marcia both made landfall in Australia within the space of six hours on Feb. 20, resulting in nearly 15,000 insurance claims as insured losses from Marcia alone reached $69 million. The report said that combined economic losses from the storms were preliminarily listed at $312 million.

Tropical Storm Fundi brought torrential rain and strong winds to Madagascar, causing six fatalities and damaging almost 7,500 homes. Total economic losses were estimated at nearly $10 million.

Flooding affected all six inhabited continents during February, with the costliest event occurring in Indonesia, killing six people. Total damages in Jakarta alone were listed at $235 million, according to the report.

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