Economic Losses from August Quake, Weather in U.S. Top $4 Billion: Aon

As far as natural perils go, August was mostly about earthquakes, along with a few tropical storms and typhoons around the world to add to the trouble, according to Aon Benfield’s Impact Forecasting in its latest global catastrophe report.

Earthquake events hit around the world in August, in Peru, Ecuador, Iran, Algeria, and South Africa. But one of the biggest took place on Aug. 24 in the Napa Valley/San Francisco Bay Area in the U.S., causing a tremor of at least magnitude 6.0. Aon Benfield/Impact Forecasting said that total economic losses from the event could hit the $2 billion mark, with insured losses only in the hundreds of millions of dollars because of the small levels of residential insurance penetration in Napa County and areas close to the epicenter (5.3 percent, versus 10 percent in surrounding counties).

There was also the magnitude 6.1 earthquake that unsettled Yunnan Province in southwest China on Aug. 23, killing at least 617 people and causing injury to more than 3,143 additional people. This event makes the Napa Valley quake pale in comparison in terms of damages, with economic losses predicted to reach $6.3 billion. More than 25,800 homes collapsed after the quake and 200,000 more sustained damage, according to the report.

Other major weather events that struck in August include:

• Major flooding in parts of the U.S. Midwest, Northeast and Mid-Atlantic due to excessive rainfall. At least one person was killed, and massive rain struck Detroit, Baltimore, and Long Island, N.Y. in particular. The report predicts that the combined events likely surpassed $2 billion in economic losses, with insured losses to both the federal flood insurance program and private insurers surpassing $500 million.
• Heavy rains and thunderstorms also affected several parts of China during the month. According to the report, more than 40,000 homes sustained damage or were destroyed outright. Thousands of acres of crops were left submerged under water and at least 37 people died. Total economic losses: at least $1.2 billion.
• Monsoonal rains and subsequent flooding and landslides killed hundreds in parts of India, Nepal, Japan, Bangladesh, Cambodia, Pakistan and South Korea.
• Hurricane Iselle slammed into Hawaii’s Big Island, killing one person and causing at least $66 million in agriculture-related damages.
• Super Typhoon Halong collided with Japan at the strength of a tropical storm, killing 10 people, injuring 96 and causing hundreds of millions of dollars in economic damage. The storm affected the southern and central parts of Japan and dropped more than 42 inches of rain during 72 houses on parts of Shikoku Island.

Meanwhile, severe drought conditions got worse in August in Guatemala and Sri Lanka, threatening both countries’ agricultural sectors.