Filed Under:Risk Management, Loss Control

Insurers face $3 billion payout for severe weather in May

Aon Benfield's Global Catastrophe Recap reported on catastrophic weather striking in the U.S. and across the globe. (Photo: Shutterstock)
Aon Benfield's Global Catastrophe Recap reported on catastrophic weather striking in the U.S. and across the globe. (Photo: Shutterstock)

Total aggregated economic losses in the U.S. from severe weather in May was set to exceed $4 billion, while public and private insurers faced a combined payout approaching $3 billion, according to Aon Benfield's Global Catastrophe Recap report. These totals may change as further assessments are conducted.

The report reveals that several major outbreaks of severe weather swept across central and eastern sections of the United States during the month, causing extensive damage through large hail, straight-line winds, tornadoes and isolated flash flooding.

The most prolific event occurred in the greater Denver, Colorado metro region, where damage from up to softball-sized hail led to insurance payouts of more than $1.4 billion in the state alone. Significant damage from severe storms was also cited in parts of the Plains, Midwest, Southeast, and the Mid-Atlantic.

Related: Hail insurance claims jumped 48% in 2016

Devastation in Sri Lanka

Significant rainfall struck Sri Lanka following the arrival of a monsoon in the southwest and a developing tropical cycle, killing at least 213 people, with another 77 people listed as missing and presumed dead. Nearly 150 others were injured.

Flooding and landslides affected 15 of the country's 25 districts and left more than 22,200 homes damaged or destroyed. Total economic losses were preliminarily estimated at $197 million.

Claire Darbinyan, Impact Forecasting Associate Director and Meteorologist said: "With the onset of the annual monsoon season for many Asian nations, the events seen in the month of May provided a potential precursor to some of the impacts typically experienced in the region during the months of June, July, and August. The early monsoon rains were enhanced over Sri Lanka causing significant property damage and loss of life. As catastrophe models become more prevalent in Asia, the re/insurance industry is better able to provide a clearer understanding of the risks that the flood peril increasingly poses in the region."

Related: New tool evaluates climate risk for insurers

Across the globe

Other natural hazard events to have occurred elsewhere during May, among others, include:

  • Cyclone Mora made landfall in Bangladesh, prompting widespread flood and wind damage. Effects were later felt in Myanmar. At least nine people were killed and a combined 50,000 homes and other structures were damaged. Overall aggregated losses were expected to exceed $100 million.
  • In Canada, separate bouts of excessive rainfall led to major flooding events in Ontario, Quebec, the Canadian Maritimes and British Columbia, killing at least four people and damaging more than 5,200 homes.
  • Cyclone Donna became the strongest cyclone ever recorded in the Southern Hemisphere during the month of May. The storm tracked through the South Pacific Islands and caused extensive damage in parts of the Vanuatu island chain, New Caledonia and the Solomon Islands.
  • Separate moderate earthquake events struck Iran (magnitude-5.8) and China (magnitude-5.4), killing 11 people and injuring hundreds more. Thousands of homes collapsed.

Related: More extreme weather coming after record 2016 heat, WMO says


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