Yangtze River floods could cause up to $1 billion in insured lossesReprints
Corrected: An earlier version of this story reported the wrong figure for insured losses.
Flooding in China in July caused roughly $600 million to $1 billion in insured losses, while the affected areas experienced the country's worst economic losses since 1998, Aon Benfield Group Ltd.'s catastrophe model development team said Thursday.
Impact Forecasting's monthly Global Catastrophe Recap report said that much of China endured a substantial seasonal “Mei-Yu” rainfall, a persistent stationary front that led to a dramatic worsening of flooding along the Yangtze River Basin and in the country's northeast.
There was also considerable damage to the agricultural sector with an estimated 18 million acres of cropland damaged by floodwater, according to the report.
Total combined economic losses were estimated at $33 billion, with at least $28 billion occurring in the Yangtze River Basin.
However, the report said the China Insurance Regulatory Commission cited insurance claims payouts totaling less than 2% of the economic cost, with most of the claims from lost agriculture.
Nearly 20 provincial regions were affected 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.
“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,” Adam Podlaha, global head of Impact Forecasting, said in a statement.
Mr. Podlaha also said “the flood peril is one which is becoming better understood by catastrophe modelers, and the (insurance) industry is better prepared than ever to help create awareness of the risks associated with such large events.”
Separately, the U.S. reported six separate outbreaks of severe convective storms and flash flooding from the Rockies to the East Coast in July. Total combined economic losses were minimally estimated at $1.5 billion.
In contrast to China, public and private insurers were anticipated to record losses nearing $1 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, Aon said. This active weather pattern also contributed to elevated thunderstorm and flood activity and damage in the Canadian provinces of Alberta, Saskatchewan, Manitoba, Ontario and Quebec.
Total combined economic and insured losses were expected to well exceed $100 million once all assessments are completed, the report said.