Severe wildfires, flooding, severe convective storms, and heatwaves plagued the U.S. last week, according to Aon’s June 21, Weekly Cat Report. Estimated losses due to wildfires are expected to reach into the hundreds of millions of dollars, Tropical Storm Alberto may reach into the millions, flooding and severe convective storms (SCS) may reach into the tens of millions, and the loss due to heatwaves is still unknown.
Wildfires
“In the past week, dozens of new fires have sprung up primarily across the western United States. Dry conditions and strong winds combined to increase wildfire spread within states such as California, New Mexico, Washington, and others,” states the report. “The most notable wildfire incident began on June 17, when two large fires in southern New Mexico quickly grew to burn a combined 23,400 acres (9,500 hectares) of land. The South Fork and Salt Fires, along with the nearby Blue 2 fire, have since caused extensive impacts to the surrounding area.”
As for financial losses due to the flames, “Material losses in Ruidoso will likely be significant as the ongoing wildfires have so far damaged over 1,400 structures, 500 of which are believed to be residences. Given the destruction seen thus far, total economic and insured losses may reach into the hundreds of millions [of dollars]. Additional losses are possible as both the South Fork and Salt Fires are 0% contained as of June 20.”
Flooding & SCS
“Multiple waves of severe storms and heavy rainfall have impacted several locations within the central and eastern United States since June 14. Among the worst impacted was northern Minnesota, where severe flooding in St. Louis County prompted a state of emergency declaration. A similar declaration was made in the Detroit metro area due to widespread damage from severe storms and flash flooding. Notably, strong storms and heavy rainfall in southern New Mexico triggered severe flooding in Ruidoso, causing additional damage in an area currently battling large wildfires.”
The previous week, Aon reported that “A prolonged, excessive rainfall event triggered significant flash flooding over Southern Florida since June 11. The large urban corridor from Miami to Fort Lauderdale was especially impacted as flood waters inundated numerous homes, vehicles, and roadways. Additionally, scattered severe weather over the past week affected various parts of the central and southern United States. Total economic and insured losses could reach into the hundreds of millions [of dollars], possibly higher.”
Heatwaves
“Since June 16, much of the eastern half of North America experienced very warm and humid conditions due to an early summer heatwave,” says the report. “Over 75 million people in the [U.S.] were under heat warnings across the Midwest and Northeast. Dozens of locations from Chicago (IL) to Boston (MA) set new daily temperature records, while Caribou (ME) tied its all-time record of 96 °F (35.6 °C) on June 19. Heat warnings were also issued by Canada’s Meteorological Agency for Ontario, Quebec, New Brunswick, and Nova Scotia.”
Expert Insights
“The report shows two trends: More severe and variable weather events worldwide,” says David J. Dybdahl, CPCU, CIC, ARM, MBA, president of American Risk Management Resources Network, LLC (ARMR). “There is more moisture in the atmosphere than the past ‘normal.’ We are at a point where there are no ‘normals.’ Insurance regulators that approve insurance rates need to take into account that past weather patterns are not necessarily predictive of future weather events. Property insurance premiums will need to increase in step with the more severe weather. Property Insurers will need to invest more into funding resiliency and loss avoidance on insured properties, in addition to just paying for losses.”
It does appear that significant mass weather events this season have recently stretched from states like New Mexico to Minnesota to Florida and beyond,” adds Samuel D. Habeeb, attorney at law, Maron Marvel Bradley Anderson & Tardy LLC. “Flooding appears to be a larger impact at this stage, and thus there could well be an associated increase in risk management costs. An uptick in property claims and potential coverage dispute litigation could result, due to the inevitable fact questions and policy issues which arise from the nuanced and various scenarios that arise due to flooding.”