Aon Catastrophe Report: Global Drought Losses to Surpass $8B as El Niño Intensifies

A new report reveals that as a result of severe drought conditions in the western U.S. total economic losses are expected to reach $3 billion – mostly attributable to agricultural damage in California. Several Caribbean and Central American nations issued alerts as droughts worsened.

Drought conditions also affected Eastern Europe, Africa, the Caribbean, and Central America during August, with combined economic losses of more than $2.6 billion occurring in Romania, Czech Republic, and Poland.

As El Niño continues to intensify in the coming months, it is expected that global drought losses will surpass the current forecast of $8.0 billion in economic damage.

Impact Forecasting, Aon Benfield’s catastrophe model development team, released the latest edition of its monthly Global Catastrophe Recap report, which evaluates the impact of the natural disaster events that occurred worldwide during August 2015.

“As we continue to see the prospect of El Niño becoming one of the strongest in decades, more and more impacts will be apparent around the world. This is already true in the form of global drought losses, as several countries have endured a severe lack of rainfall and agricultural impacts. On the flip side, tropical cyclone activity in the Pacific Ocean maintained its torrid pace in August due to above-average sea surface temperatures and favorable atmospheric conditions. Multiple landfalling storms in Asia-Pacific left considerable damage, and more activity is expected as we enter the peak of the cyclone season,” said Steve Bowen, Impact Forecasting associate director and meteorologist.

Elsewhere during August, Super Typhoon Soudelor tracked through Saipan, Taiwan, and China causing economic losses in excess of $3.2 billion. Soudelor was followed by Typhoon Goni which wrought havoc in Philippines, the Korean peninsula, and Japan, killing at least 70 people, damaging tens of thousands of homes and causing economic losses well into the hundreds of millions.

Further natural hazard events that occurred during August:

• Tropical Storm Erika impacted Dominica, Greater Antilles, Puerto Rico and Hispaniola, killing 36 people and causing economic losses of around USD100 million.
• Heavy monsoon rains killed hundreds of people throughout Pakistan, India, Nepal, Bangladesh, and Myanmar.
• Record U.S. flooding in the greater Tampa, Florida metro region caused widespread property and automobile damage.
• A severe weather outbreak prompted economic losses of $475 million and insured losses of $325 million in the U.S., mainly due to hail and damaging straight-line winds.
• China experienced two severe weather outbreaks that prompted economic losses of more than $340 million.
• Severe weather killed 20 people in Sudan.
• The western third of the U.S., Canada’s British Columbia province, and southern and central portions of Europe all suffered damaging wildfire outbreaks during August. The costs of fighting the fires soared to well beyond $1.0 billion globally.
  Heatwave conditions throughout Europe, Middle East and Africa killed at least 125 people.

To view the full Impact Forecasting August 2015 Global Catastrophe Recap report, please follow the link: http://bit.ly/1hzc4oQ

Source: Aon Benfield