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Global economy suffers worst natural disaster losses in April in five years: Aon Benfield report


May 5, 2016   by Canadian Underwriter


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The global economy suffered the worst natural disaster losses in April in five years, according to Impact Forecasting’s Global Catastrophe Recap for the month.

A man walks at a damaged area by earthquakes in Minamiaso, Kumamoto prefecture, Japan, Sunday, April 17, 2016. Two nights of increasingly terrifying earthquakes flattened houses and triggered major landslides in southern Japan. (AP Photo/Shizuo Kambayashi)

A man walks at a damaged area by earthquakes in Minamiaso, Kumamoto prefecture, Japan, Sunday, April 17, 2016. Two nights of increasingly terrifying earthquakes flattened houses and triggered major landslides in southern Japan. (AP Photo/Shizuo Kambayashi)

Between April 14 and 16, two major earthquakes struck Japan within 24 hours, causing massive devastation, leaving at least 66 people dead and more than 4,000 others injured, said the report from Impact Forecasting, Aon Benfield’s cat modelling development centre. The United States Geological Survey registered the main tremor at magnitude-7 with an epicenter near Kumamoto. Total economic losses, including physical damage to residential and commercial structures, vehicles and infrastructure, plus business interruption, are expected to exceed US$10 billion, according to the report. The General Insurance Association of Japan cited that nearly 70,000 non-life claims had been filed and total insured losses were expected to top US$2 billion.

Related: Earthquake in southern Japan causes buildings to collapse, kills at least 9

On April 16, a major magnitude-7.8 earthquake struck Ecuador’s northwest coast, killing at least 660 people, injuring more than 17,600 and damaging or destroying more than 7,000 homes or businesses. The government listed the total economic cost of damage and reconstruction at more than US$3 billion. “Given low insurance penetration levels, the insured loss was only a fraction of the overall financial cost,” the Global Catastrophe Recap noted.

Related: Second earthquake in two days in Japan causes landslides

Also in April, no fewer than five outbreaks of severe convective storms impacted the United States, with parts of the Plains, Midwest, southeast and mid-Atlantic all citing varying levels of damage resulting from tornadoes, straight-line winds and large hail. The most substantial damage occurred due to hail, with Texas enduring serious damage. Total aggregated economic losses were tentatively estimated to exceed US$4 billion. Public and private insurers were likely to face losses beyond US$3 billion. In Houston, at least 7,000 homes were inundated; total economic losses were expected in excess of US$1 billion.

Related: Earthquake kills 235 in Ecuador

Other severe weather events during April include:

  • Excessive rains led to considerable flooding across Argentina, with the provinces of Entre Rios, Corrientes, Sante Fe, Chaco, Formosa and Santiago del Estero and Uruguay sustaining the worst damage. Total economic losses to agriculture alone were estimated at US$1.3 billion;
  • Thunderstorms and heavy rainfall across central and eastern sections of China, causing widespread damage to more than 30,000 homes and 15,000 hectares of cropland. Total economic losses were listed at US$45 million;
  • Pre-monsoon rains led to significant flooding and landslides in northeast India from April 22 to 25, killing at least 18 people. In one state alone, the government estimated flood damage at US$150 million; and
  • Severe thunderstorms impacted several provinces in China, with hail damaging nearly 2,000 homes and other structures (primarily greenhouses). Total economic losses, almost entirely incurred to agriculture, were estimated at US$216 million.