April-May Insured Losses of $15B Triples Annual Average

NU Online News Service, June 22, 3:29 p.m. EST

Aon Benfield says U.S. insured losses in April and May are nearly triple the annual average over the last 20 years.

Losses from thunderstorms in the two-month span reached about $15 billion. Economic losses stand at an estimated $21.65 billion, says Aon Benfield, the global reinsurance intermediary of Aon Corp.

A new report from the firm breaks down severe weather events in April and May into eight timeframes, five of which were billion-dollar catastrophes.

The costliest was a set of storms April 22-28 that cost insurers an estimated $5 billion in losses. This period included 334 tornadoes, the largest outbreak in history. An EF4 tornado hit Tuscaloosa, Ala. and at least three EF5 twisters touched down elsewhere in the Southeast and Tennessee Valley during this time span, according to Aon Benfield.

Storms from May 21-27 caused an estimated $4.5 billion in insured losses. This system included an EF5 tornado that touched down in Joplin. Mo.

Adding weather events as of mid-June, insured losses total at least $15.5 billion. Average annual insured losses from severe weather from 1990-2010 are about $5.5 billion, adds Aon Benfield.

Catastrophe risk modelers estimate insured losses of between $2 billion and $6 billion for the late April tornado outbreak. AIR Worldwide adds up to $7 billion in losses due to late May storms.

The tornado outbreaks led to a historic number of deaths—585 in the eight events highlighted in Aon Benfield’s report and more than 150 in Joplin alone. The reinsurance intermediary comments on the loss of life, surmising that several factors are involved: population growth, tornado strength, time of day, building type, and building strength.