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The deadly storms that hit Texas this week have resulted in over $6 billion in insured losses, an industry analyst said, with the potential for more losses this weekend.
Steve Bowen, Chicago-based director of Impact Forecasting, Aon Benfield Group Ltd.'s catastrophe modeling development team, said Thursday that Texas has already set a record for the highest severe convective storm-related insured losses for the year.
“The industry in the state is already facing more than $6 billion in payouts from primarily hail-driven events and we have yet to hit the mid-point of the year,” Mr. Bowen said in an email. “It's a pretty staggering total. Most of those losses have occurred since the end of March, which further validates just how active this recent stretch has been for Texas.”
Impact Forecasting said that more than 1,000 residents were evacuated and hundreds of water rescues were carried out by overwhelmed emergency services. News report have said that the most recent storm system has killed at least 12 people, including five soldiers stationed at the Fort Hood military base who died Thursday when their vehicle overturned in a flooded creek.
Texas Gov. Greg Abbott declared a disaster for 31 affected counties on June 1.
Mr. Bowen, who noted that current data is not available for the last three weeks, said there has not necessarily been an increase in frequency of hail or severe convective storm reports in Texas this year, but there have been particularly intense storms tracking over densely populated and exposed regions of the state.
“When you consider how quickly the Texas population has grown in recent years,” he said, “the probability of severe weather impacting a populated area is also on the rise.”
Citing U.S. Census Bureau data, the Office of the Texas Comptroller said that between 1980 and 2010, Texas' total population increased by 76.7%, from about 14.2 million to more than 25 million.
Despite the losses, Mr. Bowen said the insurance industry is currently well positioned to be able to handle the volume of storm claims.
“The last few years on the whole — thanks to a dearth of hurricane landfalls in the United States – has left insurance capital at record high levels,” Mr. Bowen said in his email. “With that said, any time states are faced with economic damages in the billions of dollars, it is going to put a strain on local budgets. Noninsurable damage to things such as infrastructure often adds up quickly.”
The Insurance Council of Texas said the Lone Star State has been hammered by severe storms and flooding this year. Hailstorms in Fort Worth and Plano in March resulted in $1.3 billion in insured losses and an April 11 hailstorm in Wylie caused $300 million in insured losses.
The council said auto and homeowner losses from last month's hailstorms in San Antonio are mounting as insured losses have reached $1.9 billion. This estimate does not include any commercial losses, such as schools, grocery stores, retail outlets or office buildings, which could push the total insured losses well over $2 billion.
“Hail fell somewhere in Texas on 20 days in April and 25 days in the month of May,” Mark Hanna, the council's public relations manager, said in a statement. “Our continuing round of severe thunderstorms has also unleashed a record amount of rainfall that has resulted in major flooding in many parts of the state.”
The council said that many insurances have already handled more wind and hail claims for this year than all of last year.
The National Weather Service issued a hazardous weather outlook for South Central Texas on Friday, forecasting scattered to numerous showers and thunderstorms on Saturday, which are expected to become more isolated to scattered by Sunday. A few storms could briefly become strong with small hail and gusty winds up to 50 MPH.
While thunderstorm-related losses have been high in Texas this year, Mr. Bowen said these losses pale when compared with the costs that the state incurred from Hurricane Ike in 2008, which caused nearly $20 billion in damage in Texas alone, with public and private insurers picking up more than $12 billion of the losses.