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Recent U.S. winter storms cost preliminary insured losses of US$2.3 billion: Munich Re


April 8, 2015   by Canadian Underwriter


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The cold and snowy winter of 2014/2015 in the United States caused preliminary direct economic losses of US$3.2 billion and industry-wide insured losses of US$2.3 billion, compared with US$4.4 billion direct economic losses and US$2.5 billion insured losses for the 2013/2014 winter season, Munich Re said in a statement issued on Wednesday.

 A snow shoveler crosses a street during a winter snowstorm in Cambridge, Massachusetts January 24, 2015. Reuters/Brian Snyder

The 2014/2015 aggregated winter storm loss data is based on preliminary information from the Munich Re NatCatSERVICE  and Property Claim Services (PCS), reflecting the 11 major winter storms identified by PCS.

“The majority of winter storm claims are due to frozen pipes bursting, resulting in water damage to buildings and personal property,” Mark Bove, senior GEO research specialist with Munich Re America, said in the statement. “The remainder of insured losses across the winter season were primarily associated with roof damage due to the weight of snow and ice, freezing rain events downing trees and power lines, ice damming on roofs, and automobile accidents due to slippery driving conditions.”

Related: Severe winter weather drives Allstate’s estimated cat losses for February

The coldest temperatures during the U.S. winter season 2014/15 occurred in February, while record warm temperatures were registered simultaneously in other parts of the country, added Dr. Eberhard Faust, of Munich Re’s Geo Risks Research/Corporate Climate Centre, in the statement.

The reason for the cold weather in the eastern U.S. was the repeated influx of arctic air into the central and eastern parts of the country, steered by a strong persistent trough of the jet stream. Several strong snow storms in late January and early February brought record snow amounts to the New England states, with Boston recording the biggest snowfall in that city’s history. By contrast, globally January and February 2015 were the warmest first two months of any year since the start of temperature records, according to the National Oceanic and Atmospheric Administration.

Related: Water board: Californians saved less water in February than any other month with drought data

The persistent jet stream pattern causing the cold winter on the east coast also caused record heat and continued drought conditions in California. Although a series of powerful winter storms brought heavy rains and high winds to California in early December, causing an estimated US$300 million in insured loss, the rainfall barely made a dent in the drought, Munich Re said.

By late December, dry weather again dominated California, and would do so for the remainder of the winter, leading to worsening drought conditions. With record low levels of snowpack in the Sierra Nevada mountain range and significantly depleted levels of both surface and groundwater, the government of California implemented its first mandatory state-wide water restrictions in its history. “Even with water restrictions in place, the continuing drought will likely impact California’s agricultural industry, and raise the risk of severe wildfires along the wildland-urban interface,” the statement said.

Related: $1 billion water plan heads to California governor for signature as drought lingers

“It is currently unclear whether human-made climate change played any role in the severity and duration of the 2015 winter season across eastern North America,” Bove said. “However, new research investigating links between climate change and the northern hemisphere winter give some indications that the arctic polar vortex is more likely to become destabilized in a warmer world, potentially leading to more mid-latitude cold outbreaks.”


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