U.S. Winter Weather Poised to Exceed a Record $10 Billion in Direct Economic Loss

Polar Vortex generates record-breaking cold temperatures and widespread disruption leading to costliest winter weather event for U.S. insurance industry ever...

Aon plc launched the latest edition of its monthly Global Catastrophe Recap report, which evaluates the impact of the natural disaster events that occurred worldwide during February 2021.

The report reveals that a prolonged stretch of winter weather conditions impacted most of the United States from February 12-20. The Polar Vortex generated record-breaking cold temperatures, which extended as far south as the U.S. / Mexico border. Concurrently, a series of low-pressure systems produced rounds of hazardous snow, sleet, freezing rain, ice and severe thunderstorms with impacts spanning from Washington state to the Mid- Atlantic. The storms resulted in power outages for millions, transportation disruptions, extensive property damage (particularly in the Southern Plains due to burst pipes) and impacts to the agricultural sector. Aon expects the total direct economic cost in damages and net-loss business interruption to well exceed $10 billion.

Meanwhile, a magnitude-7.1 (USGS) earthquake struck off the coast of Japan’s Fukushima Prefecture on February 13, killing one person and injuring 187 others. As many as 4,700 residential structures were damaged or destroyed. Total economic losses were expected to reach into the hundreds of millions (USD). The General Insurance Association of Japan (GIAJ) noted that nearly 88,000 insurance claims had already been filed.

Tropical Cyclone Niran caused notable wind- and flood-related impacts across the coastal areas of Queensland and New South Wales on the eastern coast of Australia from February 25 through March 4. Thousands of homes, in addition to other private and public infrastructure, were damaged. Economic losses due to crop damage alone was listed at AUD200 million ($155 million).

Steve Bowen, director and meteorologist on the Impact Forecasting team at Aon, said: “The unprecedented volume of winter weather impacts tied to the Polar Vortex across the United States in mid-February will result in a prolonged period of loss development, but will certainly end as the costliest insurance industry event for the peril on record. Despite being the coldest February for the contiguous U.S. in a generation, it marked only the 19th coldest February dating to the late 1800s. As the climate changes, such prolonged bouts of cold temperatures are likely to be less frequent, but the intensity of extreme cold events will grow more volatile. The impacts in Texas highlight the importance of infrastructure modernization and improved building code practices to better prepare for more unusual weather behavior in the future.”

Further natural hazard events that occurred worldwide in February include:

• Heavy rains and severe flooding affected at least 130,000 people in the Brazilian state of Acre from February 12-20. A state of disaster was declared across 10 municipalities. Total economic losses were anticipated to reach into the tens of millions (USD).
• Southwestern and northern France experienced notable flooding in the first half of February as multiple rivers registered notable crests. Initial estimates from insurers did not suggest a significant industry event on a national scale, yet a state of natural disaster was declared for 19 municipalities, and a preliminary assessment of total economic loss was in the tens of millions EUR.
• A magnitude-5.4 earthquake struck near Sisakht in the Kohgiluyeh and Boyer-Ahmad Province of Iran. At least two people died, and 60 others were injured. Local officials noted that 5,800 structures were damaged or destroyed.
• Morocco experienced periods of heavy rainfall during February. Urban flooding in Tangier on February 28 resulted in the deaths of 28 people. Local media reported homes and vehicles inundated with water across the city.

To view the full Impact Forecasting February 2021 Global Catastrophe Recap report, please follow the link:

http://thoughtleadership.aon.com/documents/20210310_analytics-if-february-global-recap.pdf

Along with the report, users can access current and historical natural catastrophe data and event analysis on Impact Forecasting’s Catastrophe Insight website, which is updated bi-monthly as new data become available:

http://catastropheinsight.aon.com