Hurricane Harvey likely to be one of the costliest natural disasters on record for U.S. economy: Aon Benfield

Hurricane Harvey is likely to be one of the costliest natural disasters on record for the economy of the United States, with damage from the hurricane to minimally cost tens of billions of dollars, Aon Benfield has reported.

Flood damaged debris from homes lines the street in the aftermath of Hurricane Harvey on Thursday, Sept. 7, 2017, in Houston. (AP Photo/Matt Rourke)

Impact Forecasting, Aon Benfield’s catastrophe model development team, released on Friday its monthly Global Catastrophe Recap report, which evaluates the impact of the natural disaster events that occurred worldwide during August.

Harvey came ashore in Texas on Aug. 25 to become the first major hurricane (a storm rated as either Category 3, 4 or 5) to make landfall in the U.S. since Hurricane Wilma in 2005, Impact Forecasting said in a press release. Heavy rain continued until Aug. 31, bringing record-breaking rainfall to some areas. Catastrophic flooding ensued across a swath of eastern Texas and southwestern Louisiana, as more than 60 people were confirmed dead and dozens more were injured. Additional impacts due to severe thunderstorms and flash floods were noted across the Gulf states (including Alabama, Florida and Mississippi) and Mississippi Valley.

Total economic losses were estimated to minimally reach the tens of billions (in U.S. dollars), “ensuring that Harvey is likely to become one of the costliest natural disasters on record in the U.S.,” the release said. “Preliminary published reports suggest that insured losses – including those paid by private industry and the U.S. National Flood Insurance Program – were likely to well exceed US$10 billion.”

Related: NFIP losses from Hurricane Harvey estimated to reach US$7-10 billion: RMS

“Hurricane Harvey’s landfall in the United States officially put an end to the 11-year major hurricane drought,” Steve Bowen, Impact Forecasting’s director and meteorologist, said in the release. “The impacts from the cyclone were far-reaching, and the scope of flood damage in Houston – the nation’s fourth largest city – was historic. Given the anticipated costs from direct damage and business interruption, it is expected that Harvey will eventually be recorded as one of the costliest natural disasters on record in the U.S. Harvey served as a challenging reminder of how catastrophic hurricane events can be, and with September being the peak of the Atlantic Hurricane Season, the risk of further storms remains high.”

In Canada, the report referenced a slow-moving storm system that prompted heavy rainfall across part of Ontario from Aug. 28 to 29, causing widespread flooding. The worst damage was noted in parts of Windsor, Tecumseh and Essex, with Impact Forecasting saying that were more than 1,000 initial reports of flooded basements in Windsor alone. Total economic and insured losses were expected to reach into the millions in U.S. dollars. The City of Windsor reported in a statement last week that as of 3:45 p.m. on Aug. 30, Windsor City Services (311) had received 2,688 basement flooding reports. In an update on Thursday, the city said that it had received 5,442 basement flooding reports and that Ontario’s Ministry of Municipal Affairs has declared the flood a disaster, with applications for disaster assistance relief available.

Elsewhere, Typhoon Hato and Tropical Storm Pakhar both made landfall in China’s Guangdong province within one week of each other, causing considerable damage and loss of life in multiple provinces as well as Macau and Hong Kong. Economic losses from Hato alone were minimally estimated at US$3 billion, while combined insured losses from both storms were estimated at US$535 million.

Related: Total property damage from Hurricane Harvey’s flooding estimated at between US$65-75 billion: AIR Worldwide

Other nat cats that occurred worldwide in August include:

• More than 1,300 people were killed across South Asia due to extensive monsoonal flooding and landslides during August. Throughout India, Bangladesh, and Nepal, tens of millions of people were affected, as approximately one million homes were damaged or destroyed. Extensive damage to agriculture and infrastructure was also endured in northeastern India, southern and eastern Nepal, and northern Bangladesh;
• Multiple rounds of flooding impacted several Chinese provinces claiming at least 100 lives and generating aggregated economic losses in excess of US$1.2 billion;
• Floods in northern Vietnam claimed 40 lives and caused losses of US$88 million;
• Torrential rainfall over portions of Africa during August led to at least two significant landslides that claimed an estimated 1,250 lives. The largest of these occurred in Sierra Leone on Aug. 14, where the death toll in Freetown was estimated at approximately 1,050;
• Several rounds of severe weather including at least two derechos (windstorms) impacted multiple central European countries through the middle part of August. Widespread property, agricultural and forestry damage was reported from Poland, the Czech Republic, Slovakia, Germany, Switzerland and Austria. Both economic and insured losses were expected to reach well into the hundreds of millions in euros; and
• On Aug. 8, a magnitude-6.5 earthquake struck China’s Sichuan province, damaging 72,500 homes.