Insurance payouts for December weather could top $2 billion: Aon

Insurance payouts for December weather could top $2 billion: Aon | Insurance Business America

Insurance payouts for December weather could top $2 billion: Aon
Extreme weather during the last 10 days of December could leave insurance companies on the hook for more than $2 billion, a report from reinsurance broker Aon Benfield suggests.

A flurry of snowfall, hail, winds, tornadoes and flooding killed 64 people in the United States and economic losses from the storms are likely to total more than $4 billion for the month.

Flooding in Tennessee and in other states along the Mississippi River was among the most damaging events, but Aon says insurance payouts resulting from the damage may not be high.
“The event is ongoing, but given under-insurance or a lack of any…flood insurance across some of the hardest-hit areas in Missouri and Illinois, much of the flood loss is not expected to be covered by insurance,” said report Author Steve Bowen.

In Texas, flooding and tornadoes made the Dallas area another of the more damaged areas. The Insurance Council of Texas reported losses of $1.2 billion in the metro area alone.

The US accounted for 60% of all global insured losses in 2015.

Despite these staggering numbers, Aon Benfield added that a report to be released later this week will show that overall losses from natural disasters in 2015 were below normal on both an economic and insured loss basis despite the fact that there was a higher number of disasters.

This lack of loss is contributing to soft market conditions, which is exerting downward pressure on nearly all lines of property/casualty insurance. Property in particular is expected to see large decreases, between -15% to -12% for catastrophe-exposed risks and -12.5% to -10% for non-catastrophe, according to an analysis from Willis Group.

Other lines expected to show significant losses include casualty (-5% to flat), aviation (-20% to -15%), healthcare professional liability (-5% to flat), marine (-10% to flat) and political risk (-5% to flat).