Aon: Natural catastrophes cost global economy 'tens of billions' in September, highlighting the prevalence of global under-insurance

Aon's Impact Forecasting team launched the latest edition of its monthly Global Catastrophe Recap report, which evaluates the impact of natural disaster events that occurred worldwide during September 2018.

The report reveals that the United States endured two tropical cyclone landfalls during the month - Tropical Storm Gordon and the costlier Florence, which made landfall in North Carolina as a Category 1 hurricane.

At least 53 people were killed directly or indirectly by Florence, with total economic losses set to minimally exceed USD 10 billion, and insured losses expected to reach low-digit billions due to low flood insurance penetration.

Elsewhere, Typhoon Jebi made landfall in Japan and prompted widespread wind and flood damage across numerous prefectures. Total economic losses were expected to reach well into the billions of dollars (USD), and the General Insurance Association of Japan (GIAJ) cited that nearly 486,000 insurance claims had been filed, with the expectation of a multi-billion-dollar payout.

Super Typhoon Mangkhut had a widespread impact in the Philippines, Hong Kong, and China. The one-time category 5 storm killed at least 102 people and damaged more than 210,000 homes in the Philippines alone. Total combined economic damage and net loss due to business interruption is expected to reach into the billions of dollars (USD), while the local insurance industry in China and Hong Kong forecast payouts approaching or exceeding USD 1 billion.

A major magnitude-7.5 earthquake and tsunami caused catastrophic damage across Indonesia's Sulawesi Island on September 28, killing more than 2,000, with many more missing. Total economic damage is expected to approach or exceed USD 1 billion.

Another strong earthquake struck the Japanese island of Hokkaido on September 6, killing 41 people and injuring 680 others. The GIAJ stated that 12,279 insurance claims had been filed.

Steve BOWEN, Impact Forecasting Director and Meteorologist, said: "September will be recorded as the costliest month of 2018 so far, as global economic losses from natural catastrophes are expected to reach into the tens of billions of dollars. A series of significant catastrophes - including Hurricane Florence, Typhoon Jebi, Typhoon Mangkhut, and the Indonesian earthquake - were poised to cause tens of billions in economic damage. Each of these events were also noteworthy, since a majority of the losses are likely to be uninsured. This once again highlights that whether an economy is considered mature or emerging, there continue to be gaps in insurance coverage on either a market-wide or individual peril basis. As natural peril risks increase, it becomes even more important to close those gaps to help people in the recovery process."

Further natural hazard events that occurred worldwide during September include:

  • Significant flooding impacted many areas around the globe during the month. In Mexico, more than 300,000 homes were inundated by floodwaters in the hardest-hit state of Sinaloa. Other severe flooding events impacted parts of the United States, West Africa, China, India, North Korea, and Vietnam.
  • Outbreaks of severe weather led to tornadoes, straight-line wind, or hail damage in parts of the United States and Canada (including an EF3 tornado which touched down in the province of Ontario). Total combined economic losses are expected to reach into the hundreds of millions (USD).
  • A series of windstorms marked an early start to European Windstorm season. Three storms - Ali, Bronagh, and Fabienne - brought periods of heavy rain and hurricane-force winds to parts of Western, Northern, and Central Europe. A rare "medicane" also impacted Greece.
To view the full Impact Forecasting September 2018 Global Catastrophe Recap report, please follow the link: http://bit.ly/2REXRtu

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: www.aonbenfield.com/catastropheinsight

Follow XPRIMM Publications on LinkedIn, for more data on the insurance and financial industry.

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