NU Online News Service, June 6, 11:41 a.m. EDT
Thunderstorms in the U.S. that struck from May 20 to May 27 are expected to cause between $4 billion and $7 billion in insured losses, according to catastrophe modeler AIR Worldwide.
AIR says the losses reflect insured physical damage to residential, commercial and industrial properties—both structures and contents; automobiles; additional living expenses for residential claims; business-interruption losses; and effects of demand surge. The estimate does not reflect “non-modeled losses, including loss-adjustment expenses,” the cat modeler adds.
“The month of May, normally the most active month for tornadoes, began quietly,” says Tim Doggett, principal scientist at AIR Worldwide, in a statement. “For three weeks, only a handful of isolated tornadoes were reported. But on May 20, severe thunderstorms in eastern Texas and parts of Arkansas and Oklahoma brought high winds, hail and five reported tornadoes. Over the next seven days, more than 150 confirmed tornadoes raged across the heart of the country.”
He says the severe weather “funneled across a corridor that stretched from Lake Superior to central Texas and east through Missouri, Tennessee, Kentucky, Ohio and to the East Coast, impacting more than 20 states in all.”
Doggett states that the individual meteorological elements that caused the tornadoes are not unusual. “Large, strong jet stream disturbances happen occasionally; persistent low-pressure frontal systems are common, especially in spring. And the storms that developed occurred where they are expected to occur at this time of year.”
However, he adds, “What is unusual is for all of the factors that contribute to the development of severe thunderstorms to have aligned themselves so optimally in the same place at an opportune time. To get optimal intense instability, shear and lift all in the same place for a long period of time is a relatively rare circumstance.”
AIR says Missouri was most severely hit from May 20 to May 27. Damage to the state includes the May 22 tornado strike in Joplin.
Kansas saw 14 tornadoes touch down on May 21 alone, with the city of Reading hit the hardest. Texas, Indiana and Minnesota were also impacted by the storms.
Meanwhile, Pembroke, Bermuda-based reinsurer Partner Re Ltd. says it expects losses related to the tornado outbreak in April to be approximately $50-$70 million
Partner Re says the net loss for this event, which will be recorded in the company's second-quarter 2011 results, will primarily impact the company's catastrophe, North America and global (Non-U.S.) specialty subsegments.
Loss estimates are pre-tax, net of retrocession and reinstatement premiums, and relate to all reinsurance contracts and insurance-linked securities expected to be impacted by these events, Partner Re adds.
In late May, catastrophe modeler Risk Management Solutions said losses from the April storms will likely be in the range of $3.5 billion to $6 billion.
Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader
Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
- Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.