RISK MANAGEMENT

Asia Records US$10 Billion Economic Loss as Severe Flooding Continued in July

Relentless seasonal flooding that began in mid-June resulted in continued fatalities and damage across parts of Asia during July, according to the Global Catastrophe Recap report released by Impact Forecasting, Aon Benfield's catastrophe model development team.

The greatest impacts were recorded in China, where nearly 200 people were left dead or missing and hundreds of thousands of homes were damaged or destroyed. The Ministry of Civil Affairs listed combined economic flood damage at more than US$10 billion during a six-week stretch, much of which occurred in the Yangtze River Basin.

Heavy flooding also occurred in Japan following the landfall of Tropical Storm Nanmadol and abundant remnant moisture associated with a frontal boundary, with more than 2,600 homes and other structures damaged or destroyed as extensive flooding and landslides affected Fukuoka, Oita, Shimane, Kumamoto, and Hiroshima prefectures.

Total economic losses were expected to near US$1.0 billion.

Meanwhile, monsoon rains killed hundreds and caused major damage to structures, agriculture and infrastructure in parts of India, Bangladesh and Pakistan. Total economic damage was minimally listed in the hundreds of millions (USD).

Additional seasonal rains in Thailand killed at least 23 people and caused economic damage in excess of US$300 million, while flash flooding in northern Switzerland prompted claims payouts of nearly US$90 million.

Two separate instances of powerful thunderstorms resulted in considerable damage in Turkey, marked by large hail and flooding throughout the greater Istanbul metro region. Turkish insurers anticipated combined claims payouts reaching US$440 million; overall economic losses were higher.

Additional severe thunderstorms and subsequent flooding affected many sections of the United States. Damage and casualties resulting from large hail, straight-line winds, isolated tornadoes and flash floods were noted in the Midwest, Plains, Southeast, Mid-Atlantic and the Desert Southwest. Total combined economic and insured losses were expected to enter the hundreds of millions (USD).

“There was no shortage of global natural disasters during July, though the vast majority were reported in Asia where enhanced seasonal monsoon rainfall over China and throughout South Asia led to significant flooding that caused considerable loss of life, and billions of dollars of damage to property and agriculture,” says Claire Darbinyan, Impact Forecasting Associate Director and Meteorologist.

“In addition, three tropical cyclones in the region enhanced the monsoonal flow to trigger further flooding in multiple countries. Given low levels of insurance penetration in the region, the majority of these losses are expected to be uninsured, highlighting the considerable protection gap and the potential for re/insurers to further offer their specialist risk management skills."

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