The economic and insured losses the US has incurred from natural calamities last year were significantly above the country’s long-term average, a new global report from professional services firm Aon has revealed.
In its latest Weather, Climate, and Catastrophe Insights, data gathered by the consulting firm showed that the US economy sustained more than $169 billion in total losses in 2021 – a figure that is 95% above the annual 21st century average of $86 billion, and a whopping 230% higher the $51-billion median.
Nearly $92 billion of last year’s economic losses were covered by public and private insurers, accounting for 54% of the total. This amount is 108% and 227% higher compared to 21st century yearly ($44 billion) and median ($28 billion) averages, respectively.
Globally, the US accounted for 49% of the $343 billion in overall economic losses, about 71% of which were insured.
Natural catastrophes in the US: 2021 snapshot
The US has endured several natural calamities in 2021, the destructive impacts of which were felt across the nation.
During the Atlantic hurricane season, for example, the country was struck by eight tropical cyclones – namely Claudette, Danny, Elsa, Fred, Henri, Ida, Mindy, and Nicholas. Of these, Hurricane Ida was the most intense, registering wind speeds of 150 miles per hour (240 kilometers per hour). This matched the record set by the Last Island Hurricane in 1956 and Hurricane Laura in 2020 as the most intense tropical cyclones to landfall in Louisiana. Because of this, the state became the first in the country to experience 150-mph hurricane landfalls in back-to-back years. The remnants of Ida later caused massive flooding in the Northeast, costing billions in economic and insured losses, according to the report.
Severe convective storms
Severe convective storms (SCS) also dealt the economy and the insurance industry significant losses, which primarily resulted from spring hail events. The most notable of these were the late April hailstorms that hit the metro areas of San Antonio and Fort Worth in Texas, and Oklahoma City and Norman in Oklahoma. Across the nation, hailstorms cost insurers $27 billion in losses in 2021, the third-costliest year for the peril, trailing only 2020 and 2011.
December, however, proved to be the costliest month for the SCS peril, the research noted. Two separate events within a week saw a major tornado outbreak spawn a pair of long-track EF4 tornadoes on December 10 and 11, and a historic derecho on December 15, causing widespread damage and initiating a total of 117 tornadoes. December ended up as the most active month for tornadoes ever recorded in the US.
The polar vortex in February resulted in about $15 billion in damages to property and agriculture. Extremely low temperatures brought about by the cold wave lasting almost three weeks also caused power outages impacting more than 10 million customers and causing the deaths of hundreds of people.
In contrast, the Western North America heat wave in June set a considerable number of daily, monthly, and all-time warm temperature records across the Pacific Northwest, also resulting in hundreds of fatalities and hospitalizations.
Wildfires burned at least 7.1 million acres (2.9 million hectares) in 2021, which was marginally below the 10-year average, according to the report. The Dixie Fire, which started in July and was contained in October, was the second-largest fire event recorded in California since 1932. A total of 3,629 structures were destroyed by wildfire in the state last year.
The Marshall Fire, a late December major grassland fire in Colorado, meanwhile, became the costliest and most destructive fire ever recorded in the state, resulting in $2 billion in insured losses.
The Western US also experienced one of the worst droughts in decades. By August, 95% of the region was affected by severe drought. The physical and financial toll due to prolonged drought and above-average temperatures left a major strain on the country’s agricultural and agribusiness sectors as direct economic losses were estimated to exceed $9 billion.
The Costliest natural catastrophes in the US in 2021
While the US did not break any total loss records in 2021, the widespread impacts of several events left historic loss costs across the nation. According to Brian Kerschner, senior catastrophe analyst at Aon, 23 natural calamities surpassed the $1 billion economic loss threshold in the US in 2021. These are last year’s costliest disasters, according to data gathered by the professional services firm.
1. Hurricane Ida
Timeframe: August 27 to September 02
Location: Southeast, Northeast
Insured losses: $36 billion
Economic losses: $75 billion
Hurricane Ida was the most intense tropical cyclone to hit the country in 2021, landfalling in Louisiana with wind speeds reaching 150mph. The remnants of the storm later caused severe flooding in the Northeast, resulting in $75 billion in damages. Of these, only 48% was insured but Ida still sits as the third-costliest cyclone on record for insurers, trailing only Hurricanes Katrina and Sandy.
2. February polar vortex
Timeframe: February 02 to February 20
Location: Rockies, Plains, Midwest
Insured losses: $15 billion
Economic losses: $23.7 billion
Also known as the North American cold wave, the extreme weather event brought record low temperatures not just in the US, but also in Canada and Mexico. Severe winter storms were also associated with bitterly cold weather, which resulted in heavy snowfall and ice accumulations as far south as Houston, Texas. Many regions in the Southern Plains, including Arkansas and Oklahoma, also experienced low temperatures not seen in decades. In Texas, the extreme weather caused massive strain on the power grid, causing millions of customers to lose power and hundreds of people to die because of the cold.
Timeframe: January 01 to December 31
Insured losses: $4.3 billion
Economic losses: $9 billion
The nation experienced the most expansive drought since 2000 last year, costing $9 billion in damages, almost half of which was covered by insurance companies. By August, the adverse impact of the severe drought was felt in almost the entire Western US.
4. Mid-December tornado outbreak
Timeframe: December 10 to December 12
Location: Plains, Southeast
Insured losses: $4 billion
Economic losses: $5.1 billion
December was the most active month for tornadoes in the US in 2021, registering a major outbreak, which consisted of more than 70 tornadoes that ravaged the Plains and the Southeast. Almost a hundred people were killed as a pair of EF4 tornadoes ripped through the regions, costing $5.1 billion in economic damages and $4 billion in insured losses.
5. Texas and Oklahoma hailstorm
Timeframe: April 27 to May 02
Insured losses: $2.6 billion
Economic losses: $3.4 billion
The fierce hailstorms that battered Texas and Oklahoma in late April resulted in $2.6 billion in insured losses, the fifth-highest last year. The brunt of the event’s impact was felt in the greater metro areas of San Antonio, Fort Worth, Oklahoma City, and Norman.