The flooding that struck parts of China during July this year were some of the worst since 1998, and are likely to cost $33 billion, according to Aon catastrophe report. Furthermore, only 2% of the damage is thought to be covered by insurance compared to nearly 70% for US storms
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 July 2016. Aon Benfield is the global reinsurance intermediary and capital advisor of Aon plc.
The report reveals that much of China endured substantial seasonal “Mei-Yu” rainfall that led to a dramatic worsening of flooding along the Yangtze River Basin and in the country’s northeast. Nearly 20 provincial regions were impacted by floods that have been ongoing in some areas since May. Data from China’s Ministry of Civil Affairs indicated that a combined 764 people were left dead or missing, and more than 800,000 homes and other structures were damaged or destroyed.
Considerable damage to the agricultural sector was also prevalent with an estimated 18 million acres of cropland damaged by floodwater. Total combined economic losses were estimated at USD33 billion, with at least USD28 billion occurring in the Yangtze River Basin. The China Insurance Regulatory Commission cited insurance claims payouts representing less than 2.0 percent of the economic cost, with most of the claims from lost agriculture.
Adam Podlaha, Global Head of Impact Forecasting, said:
“While it was expected that China would see above normal rainfall during the peak monsoon months with such a strong El Niño, the intensity and scope of what transpired from the associated floods were at a magnitude not seen in nearly two decades. The flood peril is one which is becoming better understood by catastrophe modelers, and the industry is better prepared than ever to help create awareness of the risks associated with such large events.”
USA and Canada – July Floods Cost Over $1.5 Billion
Total combined economic losses were minimally estimated at USD1.5 billion. By contrast to China, public and private insurers were anticipated to record losses nearing USD1.0 billion or 67% of overall economic costs.
Many of the storms were spawned by an extended period of very hot and humid conditions that led to a “Ring of Fire” thunderstorm pattern. This active weather pattern also contributed to elevated thunderstorm and flood activity and damage in Canada’s provinces of Alberta, Saskatchewan, Manitoba, Ontario, and Quebec. Total combined economic and insured losses were expected to well exceed USD100 million once all assessments are completed.
Featured image: Yangtze River floods in China, July 2016, NASA