United States Economy Endures $20+ Billion Loss from August Storms

Hurricane Laura kills at least 33 people; economic damage likely to exceed $10 billion...

Aon plc launches the latest edition of its monthly Global Catastrophe Recap report, which evaluates the impact of the natural disaster events that occurred worldwide during August 2020.

The report reveals that Hurricane Laura killed at least 33 people after making landfall in Louisiana, United States, on August 27. Laura came ashore at peak intensity after tying the record for the fastest intensification rate in the Gulf of Mexico during a 24-hour period. It also tied as the strongest hurricane to make landfall in Louisiana since 1856. Total economic losses were minimally listed at $10 billion, but likely to be even higher. The portion covered by public and private insurance entities is also expected to result in a notable multi-billion-dollar pay-out.

Hurricane Isaias made landfall near North Carolina, United States, causing notable coastal and inland water and wind damage, and spawned at least 39 tornadoes. More than six million homes and businesses lost power due to the storm, as total economic losses were estimated at $5 billion, of which slightly more than half is expected to be insured.

Globally, nine tropical cyclones made landfall in August, resulting in combined economic costs of near $20 billion.

Meanwhile, a major derecho event in the United States occurred on August 10 that killed at least four people and resulted in extensive Midwest property and agribusiness damage. The derecho occurred as part of a broader synoptic pattern from August 8-12 that was estimated to cause more than $6.5 billion in economic damage. Insurers were expected to cover more than half of the total. At least $5 billion was attributed to the derecho alone.

Record heat, low humidity, and widespread dry lightning spawned nearly 1,000 fires in California during the month, killing at least eight people, destroying thousands of structures, and leading to an insurance pay-out expected to exceed $1 billion. These fires have further persisted into early September.

Steve Bowen, director and meteorologist on the Impact Forecasting team at Aon, said: “North America and Asia endured another impactful month of weather disasters in August. Tropical cyclones, severe convective storms, and wildfires all left numerous financial and humanitarian challenges in their wake as the globe continues to deal with implications stemming from the COVID-19 pandemic. The focus for re/insurers went beyond just tropical cyclone activity, however, as a historic derecho in the United States left a multi-billion-dollar insurance pay-out to property and agribusiness owners, and early season wildfires destroyed thousands of structures across California. Record seasonal monsoon flooding in parts of Asia only further highlighted the significant protection gap that exists in highly vulnerable and exposed areas.”

Further natural hazard events that occurred in August include:

• Seasonal monsoon rains throughout August enhanced ongoing floods in central and northern parts of the greater Yangtze River basin in China, killing 92 people and producing combined seasonal economic losses listed at CNY188 billion ($28 billion), of which CNY41.5 billion ($6 billion) occurred in August alone.
• Severe thunderstorms impacted Brazil’s Santa Catarina State on August 14-15. Economic losses were minimally listed by government officials at BRL87 million ($16 million), though the final damage bill will likely be higher.
• Heavy seasonal rains in Niger resulted in notable flooding along the River Niger and its tributaries. According to governmental assessments, more than 22,000 structures were damaged or destroyed and there were at least 45 fatalities.
• Heavy rainfall in the Alpine region and southern Bavaria resulted in increased water levels in parts of Germany and Austria on August 4-5. Economic losses were initially expected to reach into the tens of millions of euros.
• Heavy rains triggered flooding in the southwestern Arabian Peninsula, notably western Yemen, in early August, resulting in 174 deaths.
• From August 5-8, a low-pressure system moved through the state of New South Wales, Australia, and resulted in heavy rainfall and strong winds exceeding 120 kph (75 mph). Up to 2,000 structures sustained damage and an extensive area of agricultural land was inundated.

To view the full Impact Forecasting August 2020 Global Catastrophe Recap report, please follow the link:

http://thoughtleadership.aon.com/documents/20201109_analytics-if-august-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