Q3 Could Be Most Expensive Ever for Natural Disasters: Report

October 16, 2017

The third quarter of 2017 is likely to break a new record as one of the costliest quarters for natural catastrophes, according to Impact Forecasting, Aon Benfield’s catastrophe model development team.

“The month of September was exceptionally busy and marked by the most active month on record in the Atlantic Ocean for hurricanes based on combined strength and longevity,” said Steve Bowen, Impact Forecasting’s director and meteorologist.

As a result, when September’s event impacts are combined with those from July and August, Bowen affirmed that “the third quarter of 2017 is expected to tally as one of the costliest quarters ever registered for natural disasters.”

His comments accompanied the latest Impact Forecasting report titled Global Catastrophe Recap – September 2017.

“The most prolific damage resulted from Hurricane Irma’s impact across the United States and the Caribbean, and Hurricane Maria’s track through the Caribbean,” he said.

“These events were poised to cause a heavy financial burden for federal governments and the insurance industry,” Bowen continued.

Another impact during the month of September were two major earthquakes in Mexico, as well as a powerful aftershock, he said.

Hurricane Irma crossed through the northern Caribbean as a Category 5 hurricane, before making landfall in the United States to become the first Category 4 landfall in Florida since 2004 when Hurricane Charley hit the region. At least 124 people were killed or missing and hundreds more were injured. Major damage occurred in the United States, Cuba, Barbuda, the Virgin Islands, and Leeward Islands.

Hurricane Maria became the second landfalling Category 5 hurricane in a matter of weeks, when it struck Dominica and grazed St. Croix. The storm later crossed Puerto Rico as a Category 4 storm — the strongest to hit the island since 1932 — resulting in catastrophic damage.

Additional damage occurred in the Dominican Republic and Haiti. At least 78 people were confirmed dead and many others were considered missing.

With assessments still ongoing for both Irma and Maria, Impact Forecasting said, it remains too early to provide a specific economic or insured loss estimate for each event. The overall financial toll of each storm is expected to reach well into the tens of billions of dollars. In each instance, public and private insurers faced payouts considerably exceeding US$10 billion.

Mexico’s earthquakes included the strongest earthquake of 2017: a magnitude-8.1 event that struck offshore the state of Chiapas, followed by a magnitude-6.2 aftershock, which together killed at least 103 people. A magnitude-7.1 earthquake then struck central Mexico, killing at least 367 people and injuring thousands more. Total combined economic damage was expected to reach billions of dollars.