AON: NATURAL CATASTROPHES COST GLOBAL ECONOMY ‘TENS OF BILLIONS’ INSEPTEMBER, HIGHLIGHTING THE PREVALENCE OF GLOBAL UNDER-INSURANCE

Aon’s Impact Forecasting team launched the latest edition of its monthly Global Catastrophe Recap report, which evaluates the impact of natural disaster events that occurred worldwide during September 2018.

The report reveals that the United States endured two tropical cyclone landfalls during the month – Tropical Storm Gordon and the costlier Florence, which made landfall in North Carolina as a Category 1 hurricane.

At least 53 people were killed directly or indirectly by Florence, with total economic losses set to minimally exceed USD 10 billion, and insured losses expected to reach low-digit billions due to low flood insurance penetration.

Elsewhere, Typhoon Jebi made landfall in Japan and prompted widespread wind and flood damage across numerous prefectures. Total economic losses were expected to reach well into the billions of dollars (USD), and the General Insurance Association of Japan (GIAJ) cited that nearly 486,000 insurance claims had been filed, with the expectation of a multi-billion-dollar payout.

Super Typhoon Mangkhut had a widespread impact in the Philippines, Hong Kong, and China. The one-time category 5 storm killed at least 102 people and damaged more than 210,000 homes in the Philippines alone. Total combined economic damage and net loss due to business interruption is expected to reach into the billions of dollars (USD), while the local insurance industry in China and Hong Kong forecast payouts approaching or exceeding USD 1 billion.

A major magnitude-7.5 earthquake and tsunami caused catastrophic damage across Indonesia’s Sulawesi Island on September 28, killing more than 2,000, with many more missing. Total economic damage is expected to approach or exceed USD 1 billion.

Another strong earthquake struck the Japanese island of Hokkaido on September 6, killing 41 people and injuring 680 others. The GIAJ stated that 12,279 insurance claims had been filed.

Steve BOWEN, Impact Forecasting Director and Meteorologist, said: “September will be recorded as the costliest month of 2018 so far, as global economic losses from natural catastrophes are expected to reach into the tens of billions of dollars. A series of significant catastrophes – including Hurricane Florence, Typhoon Jebi, Typhoon Mangkhut, and the Indonesian earthquake – were poised to cause tens of billions in economic damage. Each of these events were also noteworthy, since a majority of the losses are likely to be uninsured. This once again highlights that whether an economy is considered mature or emerging, there continue to be gaps in insurance coverage on either a market-wide or individual peril basis. As natural peril risks increase, it becomes even more important to close those gaps to help people in the recovery process.”

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