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Extreme cold in eastern North America fourth-costliest natural catastrophe in 2014: Munich Re


March 4, 2015   by Canadian Underwriter


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The unusually cold winter last year in the eastern United States and Canada was the fourth costliest natural catastrophe worldwide in 2014 for the insurance industry, while a hail storm that hit Airdrie, Alberta last August made Munich Reinsurance Company’s Top 50 list.

Image: Monday January 6, 2014; Image Credit: University of Wisconsin-Madison, Department of Atmospheric and Oceanic Sciences http://www.aos.wisc.edu/index.htmIn its Topics Geo 2014 publication released Tuesday, Munich Re stated that extreme winter weather in February, 2014 in Japan – which caused insured losses of $3.1 billion and overall losses of $5.9 billion – was the costliest event last year. All figures are in U.S. dollars.

Topics Geo 2014 included a tables listing the 10 costliest events for the insurance industry last year.

“In terms of natural catastrophes, 2014 was undoubtedly a year when the insurance industry was again able to breathe a sigh of relief,” wrote Torsten Jeworrek, chairman of the reinsurance committee of the Munich Re board of management, in the report. “For the third year in a row, losses remained below the long-term average.”

The fourth costliest natural catastrophe event in 2014 – with overall losses of US$2.5 billion and insured losses of US$1.7 billion – was winter damage in Canada and the U.S.

“A series of frigid air masses surging south from the Arctic brought record cold temperatures to the eastern United States and Canada,” Munich Re reported, adding it helped to trigger the formation of several severe precipitation events.

“Although temperatures moderated somewhat by mid- January, the persistent ridge over the northeast Pacific kept forcing Arctic air southward over eastern North America for the next three months, resulting in one of the coldest winter seasons in decades,” Munich Re stated. “Although cold air outbreaks are not uncom-mon during the North American winter, the unusually long duration and intensity of 2014’s cold weather has spurred questions regarding the impact of anthropogenic climate change on winters in the region.”

Related: Japan, U.S. winter weather brings February catastrophe total to $1 billion

That cold spell “also caused one of the largest freeze-over events of the Great Lakes in decades,” Munich Re added, noting some large icebergs stayed in Lake Superior until late May.

Overall losses in Canada ($1.9 billion) were greater than $1 billion for the fourth year in a row, Munich Re reported, adding that in 2014, $1.3 billion nat cat losses in Canada were insured.

Related: Lessons from Airdrie

The second-costliest event in 2014 was a series of severe storms May 18-23 in the U.S., which caused $3.9 billion in overall damage and $2.9 billion in insured losses. Ranked third was a series of severe storms and hail events June 7-10 in France, Belgium and Germany. That catastrophe caused $3.5 billion in overall losses and $2.8 billion in insured losses.

Munich Re also included a table of 50 major loss events of 2014, three of which affected Canada.

Related: Global insured catastrophe losses in 2014 hit lowest level in five years: Guy Carpenter

In addition to the winter damage in early 2014, Munich Re alluded to severe floods and severe storms in Canada from June 28 through July 1, which caused $850 million in overall losses and $500 million in insured losses.

Canadian Press reported earlier that 240 millimetres of rain fell June 28-29 in southeast Saskatchewan and parts of western Manitoba reported more than 100 millimetres.

Related: Manitoba approves $100 million extra spending to cover summer flood costs

A third event in Canada that made Munich Re’s list was severe storms Aug. 7-8 in Alberta, which Munich Re reported Tuesday caused $650 million in overall losses and $500 million in insured losses. Canadian Underwriter reported earlier that storm caused significant damage in Airdrie, Alberta.

Related: Severe thunderstorms batter Europe following record-breaking heat wave: AIR

Also on the Top 50 list was a drought in Brazil affecting more than 27 million people, causing about $5 billion on overall losses and causing severe losses to the nation’s sugar cane and coffee growers.

The only Atlantic hurricane causing losses in 2014 to the U.S. was Arthur, Munich Re stated.

“Winds and storm surge hit North Carolina as an SSHWS category 2 storm on landfall, and the rainfall it carried with it extended as far as New England,” Munich Re said of Hurricane Arthur. “Thanks to strict building regulations, however, and a relatively young building stock in North Carolina, only slight damage occurred. Two separate hurricanes, Fay and Gonzalo, hit Bermuda in the space of just a few days in October as an SSHWS category 1 and SSHWS category 2 storm respectively. Gonzalo in particular caused damage to houses, airport facilities and other infrastructure.”

Polar Vortex Image: Monday January 6, 2014; Image Credit: University of Wisconsin-Madison, Department of Atmospheric and Oceanic Sciences http://www.aos.wisc.edu/index.htm


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