U.S. March Storms Cost Economy $3B; Argentina, Uruguay Drought $4B: Aon Report

U.S. March Storms Cost Economy $3B; Argentina, Uruguay Drought $4B: Aon Report


A series of winter storms and severe weather in the United States during March brought economic damages of US$3 billion, with public and private insurers covering roughly two-thirds of the cost, according to a report published by Impact Forecasting, Aon Benfield’s catastrophe model development team.

These winter storms caused extensive travel delays and widespread damage across more than a dozen states, with at least 10 people killed, said the report titled “Global Catastrophe Recap March 2018.”

Also during March, the U.S. had its first notable outbreak of severe weather for 2018, which included the first EF3 tornado touchdown in 306 days, the report added. [Editor’s note: On the Enhanced Fujita (EF) scale, EF3 tornados cause severe damage and have wind speeds ranging from 136-165 mph, or 218-266 km/h.]

The report said this was “the longest such EF3+ tornado drought in the country since NOAA began keeping records in the 1950s.”

Australia

Elsewhere across the globe, the Insurance Council of Australia declared three separate catastrophes: regional flooding in Queensland; a series of bushfires in New South Wales and Victoria; and Tropical Cyclone Marcus’s landfall and impact in the Northern Territory, said the report.

A combined 4,200 claims from the three events were filed as of March 21, and insurance payouts were expected to minimally exceed US$61 million, with overall economic losses even higher.

Drought in Argentina, Uruguay

Meanwhile, the worst drought in at least 30 years continued to affect a broad region of Argentina during March, causing severe damage to summer crops. The hardest-hit areas included the states of Buenos Aires, La Pampa, Cordoba, and Santiago del Estero. Total economic losses were estimated at US$3.4 billion, or equal to a 0.5 percent reduction in GDP. Similar impacts from drought were recorded in Uruguay, where local agriculture officials anticipated economic losses in excess of US$500 million.

“With an expected multi-billion dollar impact to the agricultural sectors in Argentina and Uruguay alone, this puts additional focus on how costly the drought peril can be and the importance of crop insurance,” said Steve Bowen, Impact Forecasting director and meteorologist.

“Lingering La Niña conditions during the austral summer has led to a continued severe lack of rainfall across parts of South America,” he added. “This further signifies the sensitivities of weather patterns surrounding the phase of the El Niño Southern Oscillation (ENSO), marked by changes in sea surface temperature and wind patterns in the Eastern Pacific Ocean, and how it can influence different types of disaster risk on a global scale.”

Other natural disasters during March include:

  • Papua New Guinea continued to be hit by a series of strong aftershocks following the earthquake of Feb. 26. Two of the strongest aftershocks of M6.0 and M6.7 claimed 11 and 25 lives, respectively. The government cited that more than 10,000 homes were damaged. Total economic damage was estimated at PGK600 million (US$190 million), though this total was likely to increase.
  • A relatively weak tropical storm named Eliakim impacted portions of Madagascar from March 16-18, resulting in regional flooding and numerous landslides. According to local authorities, 21 people lost their lives and more than 17,000 homes and other structures were damaged or destroyed.
  • Two successive extratropical cyclones impacted the Iberian Peninsula from March 9-14, bringing strong winds and abundant precipitation to several Portuguese and Spanish regions. No serious injuries or fatalities were reported. The two storms were named “Felix” and “Gisele” by local meteorological agencies. Total economic losses were estimated to reach into the tens of millions (USD).
  • Additional severe weather and flooding events were noted in parts of the U.S., Brazil, Turkey, Rwanda, Kenya, South Africa, Lesotho, and China.

Source: Impact Forecasting/Aon Benfield

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