Risk analyst Aon Benfield: Drought conditions worsen around the globe – Economic losses expected to top $8 billion
4 September 2015 (Insurance Journal) – The monthly report for August from Aon Benfield’s Impact Forecasting catastrophe model development team cites the “severe drought conditions” in the western U.S. as resulting in “economic losses expected to reach at least $3.0 billion – mostly attributable to agricultural damage in California.” Several Caribbean and Central American nations are also experiencing drought conditions and have issued alerts as they worsen. Drought conditions also affected Eastern Europe and Africa in August, with combined economic losses of more than $2.6 billion occurring in Romania, Czech Republic, and Poland. “As El Niño continues to intensify in the coming months, it is expected that global drought losses will surpass the current forecast of $8.0 billion in economic damage.” Steve Bowen, Impact Forecasting associate director and meteorologist, commented: “As we continue to see the prospect of El Niño becoming one of the strongest in decades, more and more impacts will be apparent around the world. “This is already true in the form of global drought losses, as several countries have endured a severe lack of rainfall and agricultural impacts. On the flip side, tropical cyclone activity in the Pacific Ocean maintained its torrid pace in August due to above-average sea surface temperatures and favorable atmospheric conditions. Multiple land falling storms in Asia-Pacific left considerable damage, and more activity is expected as we enter the peak of the cyclone season.” [more]
Aon Benfield August Cat Report Highlights Global Droughts, El Niño, Typhoons
Executive Summary
- Drought conditions worsen around the globe; economic losses expected to top USD8.0 billion
- STY Soudelor and TY Goni wreak havoc in APAC with economic losses of more than USD4.0 billion
- Floods claim hundreds of lives worldwide and cause hundreds of millions of dollars’ worth of damage
Drought conditions intensified or developed over portions of Eastern Europe, Africa, the Caribbean, and Central America during August. Romania, Czech Republic, and Poland announced combined economic losses of more than USD2.6 billion, mainly as a result of decimated crops and poor crop yields while authorities in Botswana announced USD44 million for drought relief as crop yields were at their lowest levels for several years. Several Caribbean and Central American nations issued alerts as drought conditions intensified across the region. Meanwhile in the United States, severe drought conditions lingered in the West for another month as total economic losses were expected to reach at least USD3.0 billion. Most of those losses were attributed to agricultural damage in California. As El Niño continues to intensify in the coming months, it is expected that global drought losses will surpass the current forecast of USD8.0 billion in economic damage. Super Typhoon Soudelor tracked through Saipan, Taiwan, and China at the beginning of the month, causing economic losses in excess of USD3.2 billion. Soudelor was followed by Typhoon Goni which wrought havoc in Philippines, the Korean peninsula, and Japan. Goni claimed at least 70 lives and damaged tens of thousands of homes and caused economic losses well into the hundreds of millions (USD). Elsewhere, Tropical Storm Erika tracked through the Atlantic Ocean and Caribbean Sea, prompting flooding and landslides that claimed 36 lives. The hardest-hit areas came in Dominica, Greater Antilles, Puerto Rico and Hispaniola. Economic losses were expected approach USD100 million. Extensive damage was caused in the United States, South America, Africa, and Asia during August by flooding. Portions of Asia were worst affected as heavy monsoon rains prompted floods that claimed hundreds of lives throughout Pakistan, India, Nepal, Bangladesh, and Myanmar. In the U.S., the record flooding in the greater Tampa, Florida metro region led to widespread property and automobile damage. Worldwide economic losses were expected to exceed USD1.3 billion. A severe weather outbreak at the beginning of the month prompted economic losses of USD475 million and insured losses of USD325 million in the United States. Most of the damage was attributed to hail and damaging straight-line winds. China also experienced two severe weather outbreaks that prompted economic losses of more than USD340 million. Elsewhere, severe weather claimed 20 lives in Sudan and caused widespread disruption in New South Wales, Australia. The western third of the United States, Canada’s British Columbia province, and southern and central portions of Europe all suffered damaging wildfire outbreaks during August. Hundreds of properties were damaged and tens of thousands of hectares were charred. The costs of fighting the fires soared to well beyond USD1.0 billion globally. Heatwave conditions throughout EMEA claimed at least 125 lives. [more]
