Now that the U.S. is finally emerging from the winter of 2014/2015, the economic and insurance costs are becoming clear. The numbers are substantial, but they’re not as bad as the previous winter.
Early estimates point to $3.2 billion in preliminary direct economic losses, and $2.3 billion in industry-wide insured losses, Munich Re America said, based on data from the Munich Re NatCatSERVICE and Property Claims Services. For the 2013/2014 winter season, the U.S. faced $4.4 billion in direct economic losses and $2.5 billion in insured losses.
“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 for Munich Re America, said in prepared remarks. He added that the rest of insured losses stemmed from roof damage resulting from snow and ice buildup, freezing rain that felled trees and power lines, ice damming on roofs, and auto accidents connected to slippery driving.
Among the season highlights:
- February 2015 brought record cold temperatures to the eastern U.S., but record warm temperatures hit in other parts of the company.
- A number of major January/February snow storms brought record snow to New England, and the biggest snowfall ever to Boston.
- In early December, several winter storms brought heavy rains and high winds to California, causing $300 million in insured loss, but the rainfall didn’t do much to quell the state’s historic drought.
- California has now implemented mandatory state-wide water restrictions – an historic first, though the drought is widely expected to hit the state’s agriculture industry and increase the risk of major wildfires.
- The Sierra Nevada had record levels of snowpack.
Individual insurers are also starting to tally up the impact of their losses from the early 2015 portion of this year’s winter. Chubb said it estimates the impact of catastrophe losses for the 2015 first quarter will approach $250 million before tax, due to nine severe weather and freeze events in the United States.
Chubb will disclose its 2015 first quarter financial results on April 25, after the market closes.
Sources: Munich Re America, Chubb