Aon: August floods, quakes cause billions in economic losses

By Erin Ayers on September 10, 2014

flooding350x212-300x181Earthquakes, floods, droughts and severe windstorms throughout the world have produced billions of dollars in economic losses in August, according to Aon Benfield’s most recent Impact Forecasting report.

Notable events included the strongest earthquake to hit the San Francisco area in 25 years on August 24.

Insured claims are currently expected to reach the “hundreds of millions” levels, but the economic damage to property, infrastructure and businesses like the region’s wineries should reach at least $2 billion.

In other unique events, Hawaii’s Big Island experienced Hurricane Iselle, the state’s first tropical storm since 1958. One person died, but there were no major structural damage issues. The $66 million in economic damages here largely came from agricultural losses.

Earthquakes struck elsewhere, with activity recorded in Peru, Ecuador, Iran, Algeria, and South Africa. An earthquake in China’s Yunnan Province caused extensive damage, killing 617 people and injuring thousands more. Aon noted that total economic damage is expected to be at least $6.3 billion.

Worldwide, deadly flood events caused in the neighborhood of $4.0 billion in economic damage. In the U.S., excessive rainfall caused flooding in the Midwest, Northeast and mid-Atlantic states. The most notable damage occurred in Detroit, where 24 hours of rain produced the equivalent of two months of normal precipitation. Aon said that this event alone caused over  $1.0 billion in economic damage.

Much of China also experienced severe rain and thunderstorms during August. As many as 37 people died, while 40,000 homes were damaged or destroyed. Crop damage was also extensive, with economic losses all around pegged at $1.2 billion. India, Nepal, Japan, Bangladesh, Cambodia, Pakistan and South Korea saw monsoons that created flooding and landslides.

In Japan, Super Typhoon Halong struck, killing 10 people and injuring 96. Damage is expected to be hundreds of millions.

At the other end of the weather spectrum, several portions of the globe experienced severe drought conditions, including Sri Lanka and the Western U.S. Economic losses from the U.S. drought, which has persisted since January, are expected to already be $4.0 billion.'

Erin is the managing editor of Advisen’s Front Page News. She has been covering property-casualty insurance since 2000. Previously, Erin served as editor-in-chief of The Standard, New England’s Insurance Weekly. Erin is based in Boston, Mass. Contact Erin at [email protected].