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Hurricane Matthew causes up to US$15 billion impact to U.S. and Caribbean economies in October: Aon Benfield


November 9, 2016   by Canadian Underwriter


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Hurricane Matthew, which swept through parts of the Caribbean and United States last month, is expected to cost up to US$15 billion to both economies, according to Aon Benfield’s latest Global Catastrophe Recap.

Wendy Gable, with Southern Baptist Convention Disaster Relief, throws wood onto a pile that was removed from a home that was heavily damaged by floodwaters caused by rain from Hurricane Matthew in Nichols, S.C., Thursday, Oct. 27, 2016. Nearly a month since floodwaters consumed the town, few have returned. The fear is that many never will. A stew of contaminants stood inches to feet deep in homes for a week. As it receded, toxic black mold grew rampant, leaving nearly all of the town’s 261 homes uninhabitable. Few, if any, had flood insurance. (AP Photo/Mike Spencer)

Wendy Gable, with Southern Baptist Convention Disaster Relief, throws wood onto a pile that was removed from a home that was heavily damaged by floodwaters caused by rain from Hurricane Matthew in Nichols, S.C., Thursday, Oct. 27, 2016. Nearly a month since floodwaters consumed the town, few have returned. The fear is that many never will. A stew of contaminants stood inches to feet deep in homes for a week. As it receded, toxic black mold grew rampant, leaving nearly all of the town’s 261 homes uninhabitable. Few, if any, had flood insurance. (AP Photo/Mike Spencer)

Released on Wednesday, the report from Aon Benfield’s catastrophe model development team, Impact Forecasting, evaluates the impact of natural disaster events that occurred worldwide during October.

Hurricane Matthew swept through parts of the Caribbean and U.S. in October, killing 552 people in the former and 49 in the latter, including 28 in North Carolina, although the unofficial total in Haiti alone was as high as 1,600.

Total U.S. economic losses from Matthew were forecast to range as high as US$10 billion, while public and private insurance losses were estimated to possibly reach US$5 billion, Impact Forecasting said in a press release. Much of the inland flood loss in North Carolina went uninsured due to low take-up of the U.S. government’s National Flood Insurance Program (NFIP). Meanwhile, Matthew caused economic damage of more than US$5 billion outside of the U.S., with Cuba (US$2.6 billion), Haiti (US$1.9 billion), and the Bahamas (US$600 million) accounting for most of the loss total.

Remnant moisture from Matthew brought flooding rain and high winds to parts of Atlantic Canada, where economic damages were expected to reach tens of millions of dollars, the release said. “Portions of Atlantic Canada were lashed by a low pressure area, fuelled by the remnant tropical moisture of Hurricane Matthew, which brought significant heavy rainfall to parts of New Brunswick, Prince Edward Island, Nova Scotia and Newfoundland on October 9-10,” the report added. “Despite widespread damage and disruption, there were no reports of fatalities. Officials in Cape Breton reported damage to be well in the 10s of millions (CAD); while the repair bill for damages to roads alone in Newfoundland was expected to top CAD1.5 million (USD1.1 million).”

“The extensive footprint of Hurricane Matthew left considerable damage and humanitarian impacts from the Caribbean to Canada,” said Steve Bowen, Impact Forecasting director and meteorologist, in the release. “The system also became the costliest hurricane in the United States since Sandy in 2012. Despite causing billions of dollars in damage, it could have been even more catastrophic. Had several slight wobbles not occurred, we are likely having an entirely different conversation when it comes to the financial impact in the state of Florida.”

Other natural hazards that occurred elsewhere during October include:

  • A series of strong earthquakes struck central Italy, bringing damage and injuries to a region still in the midst of recovering from a major tremor in August. One fatality and dozens of injuries were reported, with catastrophic damage occurring in several villages. The economic toll was expected to be significant, but is still to-be-determined;
  • Super Typhoon Chaba caused widespread disruption and damage in South Korea and claimed at least nine lives. The General Insurance Association of Korea announced that more than 33,100 claims had been filed totalling US$126 million;
  • Tropical Storm Aere prompted widespread and significant flooding in central Vietnam. At least 31 people died and 122,000 homes were inundated. Significant damage to agricultural interests was also reported;
  • Typhoon Sarika and Super Typhoon Haima both made landfalls in the Philippines and China, killing at least 16 people and damaging or destroying at least 115,000 homes. Aggregated economic losses exceeded US$1.8 billion mainly due to agricultural damage; and
  • Severe flooding in portions of Asia, Central America, and Egypt claimed at least 57 lives and damaged almost 210,000 homes.