Blame the Polar Vortex and the resulting drastic U.S. winter weather for generating record direct economic losses and more carrier headaches.
Direct economic losses from those Polar Vortex-driven storms in February will exceed $10 billion, according to Aon’s latest Global Catastrophe Recap report, which dubbed it “the costliest winter weather event” ever for the U.S. insurance industry.
Steve Bowen, director and meteorologist on the Impact Forecasting team at Aon, warned that the aftereffects of the Polar Vortex would be felt by insurers for some time to come.
“The unprecedented volume of winter weather impacts tied to the Polar Vortex across the United States in mid-February will result in a prolonged period of loss development but will certainly end as the costliest insurance industry event for the peril on record,” Bowen said in prepared remarks. “Despite being the coldest February for the contiguous U.S. in a generation, it marked only the 19th coldest February dating to the late 1800s. As the climate changes, such prolonged bouts of cold temperatures are likely to be less frequent, but the intensity of extreme cold events will grow more volatile.”
The estimate includes direct economic cost in damages and net-loss business interruption.
Much of the damage came from a long-period of winter weather conditions that struck most of the United States from Feb. 12-20, Aon said. And those hostile weather conditions came from the Polar Vortex, which extended south to the U.S./Mexico border. Making matters worse, a number of low-pressure systems created dangerous snow, sleet, freezing rain, ice and severe thunderstorms from Washington state to the Mid-Atlantic.
The cacophony of storms left millions of people without power, but they also disrupted transportation and caused wide-ranging property damage – particularly in Texas and other Southern Plains as pipes burst due to the cold. The agriculture sector saw some damage as well.
At the same time, February storms and natural disaster events made their mark around the world:
- A magnitude 7.1 (USGS) earthquake struck off the coast of Japan’s Fukushima Prefecture on February 13, killing one person and injuring 187 others. As many as 4,700 residential structures were damaged or destroyed. Total economic losses were expected to reach into the hundreds of millions of dollars. The General Insurance Association of Japan noted that nearly 88,000 insurance claims had already been filed.
- Tropical Cyclone Niran caused notable wind- and flood-related impacts across the coastal areas of Queensland and New South Wales on the eastern coast of Australia from Feb. 25 through March 4. Thousands of homes, in addition to other private and public infrastructure, were damaged. Economic losses due to crop damage alone reached $155 million.
- Heavy rains and severe flooding affected at least 130,000 people in the Brazilian state of Acre from Feb. 12-20. A state of disaster was declared across 10 municipalities. Total economic losses were anticipated to reach into the tens of millions of dollars.
- A magnitude 5.4 earthquake struck near Sisakht in the Kohgiluyeh and Boyer-Ahmad Province of Iran. At least two people died and 60 others were injured. Local officials noted that 5,800 structures were damaged or destroyed.
- Morocco experienced periods of heavy rainfall during February. Urban flooding in Tangier on Feb. 28 killed 28 people. Local media reported homes and vehicles inundated with water across the city.