Insurers Slammed by Floods, Cyclones, Tsunami in October
October proved to be a busy month for insurers across the globe. The month was dominated by significant flooding in Asia, Africa and Europe, the magnitude-7.7 earthquake and tsunami in Indonesia and Super Typhoon Megi hitting the Philippines as a Category 5 cyclone, according to Aon Benfield.
The reinsurance intermediary and capital adviser’s Impact Forecasting team released its latest “Monthly Cat Recap” report, which provides an analysis of global natural perils in October including events in parts of the United States, North America, Asia, Oceania, Europe and Africa.
October saw the following climatological records:
• The second-strongest, non-tropical or post-tropical, low-pressure system ever recorded in the continental United States brought severe weather, extremely gusty winds, torrential rains and heavy snows to much of the eastern United States. At least 75 separate tornado touchdowns were confirmed, along with 521 separate reports of damaging winds.
• The heaviest rains since 1961 in China’s Hainan province triggered floods that damaged or destroyed more than 50,000 homes and other structures, affecting 2.7 million people. Total economic losses were listed at CNY1.13 billion ($169 million).
• Heavy rains and gusty winds in New South Wales, Australia led to the worst flooding in more than 80 years in isolated locations of the state. Damage consisted primarily of roof damage and flooded homes, and was estimated at AUD40 million ($39 million), of which most is expected to be covered by insurance.
“The breadth of natural catastrophes occurring this month is a continuation of an already active year in terms of global activity,” says Steve Jakubowski, president of Impact Forecasting. “The powerful earthquake and tsunami in Indonesia, the floods across Asia, Europe, Oceania and Africa, the tropical cyclones in the Atlantic, Pacific and Indian basins and severe weather across South America in October all highlight the need for reinsurers to keep informed on climatological and meteorological variances.”
And with just under a month to go until the end of the 2010 U.S. hurricane season, insurers in the Atlantic do need to keep informed. According to Risk Management Solutions (RMS), conditions in that region are still ripe for further activity. Tropical cyclone formation typically occurs in the Caribbean Sea during November due to the warmer sea surface temperatures, which currently remain above average, running as high as 1 degree Celsius above average in the region where Hurricane Tomas is now located.
Elsewhere in the Atlantic, sea surface temperatures are becoming notably cooler, running around 0.5C below average in the northern Gulf of Mexico, taking them below the critical threshold of 26.5C to support tropical cyclone activity, RMS reports.
“Sea surface temperatures are a major factor in tropical cyclone formation, but are not the only ingredient,” says Neena Saith, senior catastrophe response manager at RMS. “The levels of wind shear, which can suppress formation and are expected to reduce over the next few days across the Caribbean, will play a key role in hurricane activity over the coming weeks.”