Large U.S. storm system estimated to cost $2-$5 billion: EQECAT

Insured property losses are expected to range from $2 to $5 billion for a storm system that moved across central United States from May 18 to May 20, according to EQECAT. 

The tornado that tore through Moore, Okla. has caused damage to approximately 13,000 structures and is where the bulk of the losses are expected, the catastrophe risk modelling firm reports.

The storm system produced 16 tornado touchdowns in Kansas and Nebraska on May 18, plus 76 incidents of straight winds and 92 hail storms. On May 19, the storm widened and covered Oklahoma, Kansas, Missouri, Iowa and Illinois.

There were 29 tornadoes, 255 wind events and 142 hail storms. On the final day there were 31 tornadoes reported in Texas, Oklahoma, Kansas, Colorado, Arkansas and India, plus 218 windstorms and 105 hail storms.

This continues a dramatic tornado activity month, with an estimated six fatalities from a May 15 tornado that occurred outside of Fort Worth, Texas.

Preliminary estimates place insured losses from the tornadoes in North Texas at $250 million, according to one media report. The Insurance Council of Texas said there were reports of softball size hail and as many as 10 tornadoes. 

The May 19 tornado that hit Moore followed a similar path to a 1999 twister that caused an estimated $2.8 billion of damage ($1.4 billion in insured damage), according to rating agency A.M. Best.

“Larger, national insurers with exposure to Oklahoma are well capitalized to absorb the financial impact of this type of event,” the company said in a special report on the event. “However, smaller, individual, regional companies may be impacted negatively, depending on where they write and their degree of risk concentration relative to the ultimate path of the storm.”

While loss estimates and damage surveys are still in the early stages, A.M. Best said it doesn’t expect a significant number of rating actions as a result of the event. Overall, the tornado highlights the importance of ongoing risk management efforts, its report said.