As bad as September was in terms of natural disasters and the resulting costs, the 2017 third quarter as a whole could be positively historic as a result.
A new report from Aon Benfield’s Impact Forecasting said September will pose a major burden on the insurance industry and federal governments in the United States and the Caribbean, creating significant total catastrophe losses for the quarter, especially on top of other events.
“The month of September was exceptionally busy and marked by the most active month on record in the Atlantic Ocean for hurricanes based on combined strength and longevity,” Steve Bowen, Impact Forecasting director and meteorologist, said in prepared remarks.
Bowen noted that the most extensive damage came from Hurricane Irma’s strike across the United States and Caribbean, as well as Hurricane Maria’s Caribbean tirade. Two earthquakes in Mexico as well as a powerful aftershock made thins even worse in terms of catastrophe costs, he said.
“The third quarter of 2017 is expected to tally as one of the costliest quarters ever registered for natural disasters,” Bowen added.
Impact Forecasting isn’t the first firm to assert this. In late September, Morgan Stanley predicted that Hurricane Maria, coming on top of Hurricanes Harvey (which hit in August) and Irma and two major earthquakes in Mexico, could leave insurers and reinsurers facing more than $100 billion in insured losses for Q3.
Impact Forecasting won’t make a detailed estimate yet of economic or insured losses for the quarter, because of Irma and Maria and the complexity of the damage they caused. The firm noted it is still too early for details, in part, because of “the prolonged business interruption impact.” But the overall financial impact of each storm should “reach well into the tens of billions of dollars.” Public and private insurers in each case will deal with payouts above $10 billion, Impact Forecasting added.
Here’s a roundup of Septembers’ major natural disasters:
Source: Impact Forecasting/Aon Benfield