The Cost of Disaster Losses in 2013
Globally, natural disasters caused an estimated $45 billion dollars worth of insured losses last year according to a report published by Impact Forecasting (Aon Benfield Group Ltd.). As companies start 2014 with (hopefully) a comprehensive disaster response plan, much of what we learned in 2013 can inform how we plan and prepare for another year.
Disaster Losses By the Numbers
According to Sigma's preliminary estimates for 2013, flood damage alone in Canada totaled close to $2 billion dollars, making it one of the most expensive flood years on record. All together for the United States, the country saw nine different billion-dollar events some of which include:
- Severe thunderstorms and tornadoes caused a combined total of close to $4 billion dollars, just during the months of March and May 2013
- Snow storms, ice, and heavy rains swept through the country in the spring, adding just over $1 billion dollars to the total of insured losses for the month of April
- Thunderstorms caused approximately $10 billion dollars in damage and drought resulted in close to $3 billion dollars in insured losses in the month of January.
Putting it in Perspective
In 2013, the United States experienced 16% of the global natural disasters, which accounted for an astounding 45% of global insured losses.
Combined, insured losses from natural disasters in the United States totaled close to $12.8 billion dollars in 2013. Keep in mind that these figures reflect a year without a single major hurricane, which is very unusual. Typically, the United States will see at least one major (category 3 or higher) hurricane or tropical storm event.
Going without a major tropical event last year means that 2014 has the potential to bring about higher than anticipated hurricane damage, and impact on average insured losses. Understanding the cost of insured losses, and the major environmental events that create them, can help us all understand what serious activity may be on the horizon, and provide insights into how we can better prepare in 2014.