May cats to cost insurers $7bn – Aon - FREE

May cats to cost insurers $7bn – Aon - FREE

Fort McMurray firesInsurance claims and reinsurance payouts for May’s catastrophe activity will be at least $7bn, according to Aon, in the wake of the recent wildfires, floods, and storms.

Canada’s Alberta wildfire is set to become costliest disaster in the country’s history, according to the Impact Forecasting report.

The insurance cost of the catastrophic damage to Fort McMurray and its environs – including physical damage and business interruption – is anticipated to be in excess of C$4bn ($3.1bn), said the study.

The fire charred more than 580,000 hectares (1.43m acres) of land and destroyed at least 10% of Fort McMurray, including more than 2,400 homes and other structures.

“The severity of the wildfire damage in Fort McMurray is an unfortunate reminder of how significant insurable losses can be from the peril,” said Adam Podlaha, global head of Impact Forecasting.

“The situation in Canada has already allowed for a strong and cooperative response from both the government and the insurance industry as residents and business owners seek to assess the damage and begin the recovery process,” he said.

“Since this is just the sixth individual global wildfire to surpass the billion-dollar threshold for insurers, there is not a lot of precedent for a fire event of this magnitude,” added Podlaha.

In Europe, convective storms and floods from Storm Elvira swept across parts of northern and central Europe in late May and early June, killing at least 17 people.

Germany, France, Austria, Poland and Belgium suffered the most damage, where floods impacted many major cities, including Paris.

French and German insurance associations (the AFA and GDV) put preliminarily estimates of minimum industry claims payouts of at least €2bn ($2.3bn).

Early estimates of economic damage suggest a €4bn ($4.6bn) cost in Europe.

In the US, five convective storms hit the Midwest, while the Mississippi Valley saw tornadoes, straight-line winds, and large hailstorms.

Storm-related flooding also caused major damage in portions of Texas during the latter part of the month. Total aggregated insured losses were estimated to exceed $1bn.

Cyclone Roanu destroyed nearly 125,000 structures across five countries in Asia, although insured losses were not extremely high as insurance penetration in the regions affected is fairly low.

Other catastrophe events around the world included flooding in China, earthquakes in both Ecuador and China, landslide events in Kenya, Rwanda, and other countries, and tropical Storm Bonnie, which brought heavy rainfall to the South-eastern US.

The Aon report is viewable, here.

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