General Insurance Article - AON Benfield:Hurricane Irene could cost U.S. up to $7bn

Damage From Irene Could Cost U.S. up to $7bn, According to Aon Benfield Catastrophe Study

 Aon Benfield, the global reinsurance intermediary and capital advisor of Aon Corporation (NYSE:AON), today releases the latest edition of its Monthly Cat Recap report, which reviews the natural disaster perils that occurred worldwide during August.

 Published by Impact Forecasting, the firm's catastrophe model development center of excellence, the report reveals that insured losses solely in the United States from Hurricane Irene are expected to range between USD1.6-6.6 billion. The storm killed at least 46 people in the U.S. and injured dozens more, resulting in a dangerous storm surge and significant river flooding. Nearly eight million power outages were recorded at its peak, as well as damage to tens of thousands of homes, businesses, other structures and vehicles. Irene became the first landfalling hurricane in the U.S. since Ike in 2008.

 On August 23, a rare, magnitude-5.9 earthquake impacted the Mid-Atlantic region in the United States. The most notable impacts were felt in Washington, D.C., where several monuments sustained cracks, while additional structural damage and isolated incidents of broken gas and water pipes were seen in Virginia, West Virginia, New York, Maryland, New Jersey, Delaware and Pennsylvania. Economic losses from the earthquake were listed at approximately USD250 million, with insured losses of around USD100 million.
 Meanwhile, extreme wildfire conditions led to dozens of homes being destroyed in the U.S. states of Texas and Oklahoma during the month of August. Texas endured its hottest summer on record in 2011, combining as well with an historic drought.

 Steve Jakubowski, President of Impact Forecasting, said: "The U.S. was impacted heavily by natural catastrophe events during August, but in some ways the situation could have been far worse. Hurricane Irene was initially expected to make landfall as a more significant storm, highlighted by the extensive measures taken by many states to evacuate residents and ensure that structures were secured. In the end, Irene weakened prior to coming ashore and the resultant damage is perhaps many times less than would have been the case had Irene remained a major hurricane at landfall, as was initially expected."

 Outside of the U.S., destruction from Irene killed at least eight people in the Caribbean and the Bahamas, while Puerto Rico sustained widespread damage from the storm, expected to exceed USD500 million with an additional USD149.4 million in lost productivity to the public and private sector, according to government estimates.

 In Hispaniola, the Dominican Republic recorded DOP1 billion (USD26.3 million) in damages from the hurricane, amid total Caribbean economic losses estimated at nearly USD1.5 billion, and combined insured losses listed around USD1 billion – primarily from damage in the Bahamas.

 Elsewhere, Typhoons Muifa and Nanmadol made landfalls and killed dozens of people in parts of the Philippines, China, Taiwan, Japan and Korea. The storms caused nearly USD1 billion in combined economic losses.

 Major flooding took place across the globe during the month, with parts of North America, Africa and Asia particularly affected. In Pakistan, at least 143 people were killed and nearly 700,000 homes were damaged or destroyed by the deluge.

 And severe weather spawned tornadoes, large hail and damaging winds in the U.S., Canada, Belgium and Australia.

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