Aon: German and Chinese insurers confronted with the costliest natural disasters on record

12 August 2021 — Daniela GHETU
Extreme precipitation in mid-July resulted in the costliest European flooding event on record, and the deadliest in nearly 30 years, reads the Global Catastrophe Recap report released by Aon. Only in Germany, the official death toll listed at 197, while direct damage was anticipated at about USD 20 billion, of which up to USD 6.5 billion insured losses.

Total economic losses in Europe were expected to approach USD 25 billion, though this is a preliminary estimate and is likely to evolve. Overall, the event is likely to rank as the costliest weather event and second-costliest natural disaster event in Europe in the past 40 years (only behind the Irpinia Earthquake of 1980), on an inflation-adjusted basis. It would also mark the costliest individual natural disaster for the German insurance industry on record.

Meanwhile, historic rainfall prompted catastrophic flash flooding across China, the total economic cost of flooding in during the month of July reaching an estimated USD 25 billion, with an anticipated cost to insurers up to USD 1.7 billion - the highest natural disaster payout for the Chinese insurance industry on record.

Steve Bowen, managing director and head of Catastrophe Insight on the Impact Forecasting team at Aon, said: "One of the hallmarks of climate change involves extreme events becoming more extreme. The recent release of the IPCC's Sixth Assessment Report confirms this to be true and notes an accelerating trend of these types of extremes as seen in observed events. The recent historic rainfall and flooding in Europe and Asia while juxtaposed against the most intense drought conditions recorded in North America in decades highlights the fragility of the climate system and the need to invest in actionable strategic solutions that lower physical and non-physical risks. Improving and stabilizing these risks is essential, but also achievable."

Further natural hazard events that occurred worldwide in July include the tropical storm born by the Hurricane Elsa, leading to economic losses if about USD 775 million across the Southeast and along the Mid-Atlantic and Northeast US coastlines; wildfires that affected southern territories of Europe, especially Turkey and Greece, but also several regions in the US; severe flooding in Colombia, with total expected into the millions (USD), etc.

Read the full Impact Forecasting July 2021 Global Catastrophe Recap report, to view the full description of the events affecting different geographies in July.

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