Billion-dollar economic cost from New Zealand earthquake, according to Aon catastrophe report

Insurance losses from earthquake likely to range between $705mn and $3.5bn as insurance claims breach 15,000

Chicago, IL (Dec. 7, 2016) – Impact Forecasting, Aon Benfield’s catastrophe model development team, today launches the latest edition of its monthly Global Catastrophe Recap report, which evaluates the impact of the natural disaster events that occurred worldwide during November 2016. Aon Benfield is the global reinsurance intermediary and capital advisor of Aon plc.

The report reveals that a powerful magnitude-7.8 earthquake and several large aftershocks struck New Zealand’s South Island during the month, killing two people and injuring dozens of others. A preliminary statement from the Reserve Bank of New Zealand estimated that damage would range between NZD3.0 to 8.0 billion (USD2.1 to 5.7 billion), while insured losses would likely range from NZD1.0 to 5.0 billion (USD705 million to 3.5 billion). As of this writing, the New Zealand Earthquake Commission had received 15,075 claims.

Meanwhile, significant wildfires – many set by arsonists – swept across parts of Israel, causing extensive damage to homes, injuring at least 137 people, and causing total economic losses of ILS2.0 billion (USD520 million).

Large hail and damaging winds impacted the U.S. states of Texas and New Mexico during the month, resulting in more than USD450 million in economic damage and insurance losses approaching USD300 million.

In the second half of November, an outbreak of wildfires caused catastrophic damage to areas of eastern Tennessee, killing 14 people and injuring 134 others. The worst fire, Chimney Tops 2, damaged or destroyed more than 1,750 structures in Sevier County’s Gatlinburg and Pigeon Forge and was cited as the worst in Tennessee in more than 100 years, with an economic cost expected to significantly surpass USD100 million.

Adam Podlaha, Global Head of Impact Forecasting, said: “This year has been marked by several major earthquake events, with the peril thus far second only to flooding as the costliest disaster type. In November, a powerful earthquake brought further damage to parts of New Zealand as the country continues to rebuild following the devastating temblors in 2010 and 2011. While the associated losses with the November event are not expected to reach the magnitude of the 2010 and 2011 events, it serves as a reminder for the cat modelling sector of the earthquake risk in Oceania.”

Natural hazard events to have also occurred in November include:

  • A series of severe thunderstorms producing golf ball sized hail swept across South Australia, Victoria and New South Wales. The Insurance Council of Australia noted that 28,146 claims had been filed with payouts totaling AUD192.6 million (USD144 million). Overall economic losses were even higher.
  • Windstorm Nannette tracked through areas of Western Europe, generating severe wind gusts and isolated flooding over portions of the UK, France, Belgium, the Netherlands, and Germany. Total economic losses were expected to significantly exceed USD100 million.
  • Hurricane Otto made landfall at Category 2 strength in Nicaragua, killing 17 people in the southwest Caribbean and resulting in total economic losses estimated at near USD50 million.
  • Severe flooding events were recorded in parts of Italy, France, Saudi Arabia, Indonesia, Hispaniola, and South Africa.

View the full Impact Forecasting November 2016 Global Catastrophe Recap report.

Impact Forecasting’s 2016 Annual Global Climate and Catastrophe Report, which reviews and analyses the natural disaster events that occurred worldwide during calendar year 2016, will be available in mid-January.
Along with the report, users can access current and historical natural catastrophe data and event analysis on Impact Forecasting’s Catastrophe Insight website, which is updated bi-monthly as new data become available.

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