United States Economy Endures $20+ Billion Loss from August Hurricanes

United States Economy Endures $20+ Billion Loss from August Hurricanes

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Hurricane Laura kills at least 33 people; economic damage likely to exceed $10 billion

In a recent report commissioned by AON shows the catastrophic destruction to the US economy within the month of August. Hurricane Laura killed at least 33 people after making landfall in Louisiana, United States, on August 27. Laura came ashore at peak intensity after tying the record for the fastest intensification rate in the Gulf of Mexico during a 24-hour period. It also tied as the strongest hurricane to make landfall in Louisiana since 1856.

Total economic losses were minimally listed at $10 billion, but likely to be even higher. The portion covered by public and private insurance entities is also expected to result in a notable multi-billion-dollar pay-out.

Hurricane Isaias made landfall near North Carolina, United States, causing notable coastal and inland water and wind damage, and spawned at least 39 tornadoes. More than six million homes and businesses lost power due to the storm, as total economic losses were estimated at $5 billion, of which slightly more than half is expected to be insured.

Globally, nine tropical cyclones made landfall in August, resulting in combined economic costs of near $20 billion.

United States Economy Endures $20+ Billion Loss from August Hurricanes

Meanwhile, a major derecho event in the United States occurred on August 10 that killed at least four people and resulted in extensive Midwest property and agribusiness damage. The derecho occurred as part of a broader synoptic pattern from August 8-12 that was estimated to cause more than $6.5 billion in economic damage. Insurers were expected to cover more than half of the total. At least $5 billion was attributed to the derecho alone.

Record heat, low humidity, and widespread dry lightning spawned nearly 1,000 fires in California during the month, killing at least eight people, destroying thousands of structures, and leading to an insurance pay-out expected to exceed $1 billion. These fires have further persisted into early September.

United States Economy Endures $20+ Billion Loss from August Hurricanes

Steve Bowen, director and meteorologist on the Impact Forecasting team at Aon, said: “North America and Asia endured another impactful month of weather disasters in August. Tropical cyclones, severe convective storms, and wildfires all left numerous financial and humanitarian challenges in their wake as the globe continues to deal with implications stemming from the COVID-19 pandemic.

The focus for re/insurers went beyond just tropical cyclone activity, however, as a historic derecho in the United States left a multi-billion-dollar insurance pay-out to property and agribusiness owners, and early season wildfires destroyed thousands of structures across California. Record seasonal monsoon flooding in parts of Asia only further highlighted the significant protection gap that exists in highly vulnerable and exposed areas.”

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