Natural Catastrophe Losses for First Half of 2016: Storms in Texas Drive Losses Up
Real Estate Weekly News
By a News Reporter-Staff News Editor at Real Estate Weekly News -- US economic losses caused by natural catastrophes in the first half of 2016 were US$ 17bn (previous year US$ 12bn) of which US$ 11bn (US$ 8bn) were insured. Total worldwide losses during this period were US$ 70bn (of which US$ 27bn were insured). This was significantly higher than the prior year's first half losses of US$ 59bn, of which US$ 19bn were insured. With US$ 17bn in total losses from natural catastrophes (US$ 11bn insured), natural catastrophes in the US caused almost a quarter of worldwide economic losses, and accounted for 58% of global insured losses.
Approximately US$ 12.3bn (US$ 8.8bn insured) of this was due to a series of storms in Texas and neighboring states, including destructive hailstorms in Dallas and San Antonio, and severe flooding in the Houston Metropolitan area.
"Homes and businesses incur the brunt of these losses, and property damage from this spring's thunderstorm season remind us that a roof is a building's first line of defense against hail and wind events. Proper roof maintenance, roofing materials and installation are all critical to helping reduce these types of losses," said Tony Kuczinski, President and CEO of Munich Reinsurance America, Inc.
To help homeowners build safer, stronger structures in the face of increasing severe weather events, Munich Re and the Insurance Institute of Business & Home Safety (IBHS) recently launched FORTIFIED Home™ On the Go, an interactive tablet app available for free download from the iTunes Store. It walks homeowners, contractors and architects through the home strengthening process, providing information based on their specific input.
Weather extremes in Texas and other southern states are symptomatic of an El Nino phase, which intensifies the subtropical jet stream, which can cause an increase in severe storms in the region. Further north, El Nino conditions also caused warm and dry conditions in Alaska and western Canada, helping to trigger the worst wildfire in Canadian history. Direct losses from these fires totalled US$ 3.6bn, of which US$ 2.7bn were insured.
One beneficial aspect of El Nino conditions is that it tends to reduce springtime tornadic activity over the southern Great Plains. Although the year's thunderstorm season got off to an early start, the states of Texas, Oklahoma, and Kansas have all seen about 50% fewer tornadoes this year than in the first half of 2015. By the end of June, the number of observed tornadoes nationally was about 700, significantly below the average of 1,021 for the last ten years.
However, El Nino conditions have now faded, explained Peter Hoeppe, Head of Munich Re's Geo Risks Research Unit. "In the third quarter of 2016, the ENSO climate oscillation is expected to switch to a La Nina phase, which also has a major influence on global weather patterns. For example, La Nina tends to promote the formation of hurricanes in the tropical North Atlantic and a greater number of typhoons in the Philippines."
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