Insurance industry faces agriculture losses from China to the United States in July 2012: flooding caused more than $8.3 billion in economic losses across China during July, while the worst drought in decades worsened across much of the United States; severe weather also prompted widespread damage in parts of the United States and Europe
Aon Benfield, the global reinsurance intermediary and capital advisor of Aon plc, yesterday releases the latest edition of itsGlobal Catastrophe Recap report, which reviews the natural disaster perils that occurred worldwide during July.
Published by Impact Forecasting, the firm’s catastrophe model development center of excellence, the report reveals that flooding caused more than $8.3 billion in economic losses across China during July, while the worst drought in decades worsened across much of the United States. Severe weather also prompted widespread damage in parts of the United States and Europe.
Heavy rainfall in China caused flooding and landslides in nearly two dozen provinces, leading to 324 deaths, at least 475,000 homes destroyed or damaged, and more than 1.66 million hectares (4.1 million acres) of cropland affected, according to the Ministry of Civil Affairs (MCA). Total combined economic losses were listed at CNY53.2 billion ($8.3 billion), while the China Insurance Regulatory Commission (CIRC) noted that 47,000 claims were filed with payouts in excess of CNY1.12 billion ($176 million).
Steve Jakubowski, president of Impact Forecasting, said: “Much of China was affected by flooding rainfall during July, including parts of Beijing experiencing its heaviest rains in sixty-one years. On the opposite extreme, much of the U.S. continued to face its worst drought in several decades. Both weather events have impacted crops and the agriculture industry. To help further understand potential agriculture losses, the U.S. insurance industry has been using catastrophe models for several years. For China, Aon Benfield has responded by recently developing its Crop Reinsurance Solution (ACReS) to support this growing sector to manage its agricultural exposures.”
Additional flooding was recorded in Asia during the month, including in Japan, Indonesia, and North Korea. In Japan, the most notable event occurred over five consecutive days on Kyushu as torrential rainfall prompted flooding and 870 landslides that left at least thirty people dead.
Japan’s Fire and Disaster Management Agency (FDMA) reported that 16,045 homes, infrastructure, and agriculture had sustained varying levels of flood inundation.
Elsewhere, the worst drought in decades deepened throughout much of the United States. At least 4,313 record high temperatures were set during the month, as the heat also left more than 100 people dead. According to the National Climatic Data Center (NCDC), up to 64 percent of the contiguous United States was listed in at least a moderate drought. More than half of allU.S. counties (~1,600) were declared disaster areas. Total economic (and insured) crop losses were anticipated to reach well into the billions of dollars.
Also in the United States, a 3-day stretch early in the month saw rounds of severe thunderstorms affect parts of the Midwest, Ohio Valley, and the Northeast. Total economic losses were approximately $450 million, while various insurers received more than 50,000 claims with payouts in excess of $275 million.
Severe weather was also recorded across central and western Europe, where tornadoes, damaging winds, and up to egg-sized hail occurred. In the Czech Republic, insured losses were listed at CZK247 million ($12 million). Insurers in Slovenia recorded more than EUR4 million ($5 million) in losses. In Poland, an EF-2 tornado left up to PLN20 million ($5.9 million) in damage to forests. Storms in Georgia left 22,000 homes damaged, with economic losses listed at GEL150 million ($91 million).