Fort McMurray wildfire losses in excess of $3.1bn

An historic wildfire caused catastrophic damage in the Canadian city of Fort McMurray throughout the month of May, becoming the costliest natural disaster in the country’s history, according to Impact Forecasting, Aon Benfield’s catastrophe model development team.

Insured losses – including physical damage and business interruption – are anticipated to be in excess of C$4 billion ($3.1 billion), according to Impact Forecasting’s latest Global Catastrophe Recap report, which evaluates the impact of the natural disaster events that occurred worldwide during May 2016.

The fire charred more than 580,000 hectares (1.43 million acres) of land and destroyed at least 10 percent of Fort McMurray, including more than 2,400 homes and other structures, according to the report.

Adam Podlaha, global head of Impact Forecasting, said: “The severity of the wildfire damage in Fort McMurray is an unfortunate reminder of how significant insurable losses can be from the peril. The situation in Canada has already allowed for a strong and cooperative response from both the government and the insurance industry as residents and business owners seek to assess the damage and begin the recovery process.

“Since this is just the sixth individual global wildfire to surpass the billion-dollar threshold for insurers, there is not a lot of precedent for a fire event of this magnitude.”

Convective storms and widespread flooding from a storm dubbed ‘Elvira’ swept across parts of northern Europe between late May and early June, also, killing at least 17 people. The most considerable damage was noted in Germany, France, Austria, Poland and Belgium where floods impacted many major metropolitan regions, including Paris

Insurance industry associations in France (AFA) and Germany (GDV) preliminarily estimated combined minimum claims payouts to exceed €2.0 billion ($2.3 billion). Tentative overall economic damage was estimated to approach €4 billion ($4.6 billion).

Five outbreaks of severe convective storms impacted the United States during May, according to the report. Parts of the Plains, Midwest, and Mississippi Valley were impacted by damaging tornadoes, straight-line winds, and large hail. Storm-related flooding also caused major damage in portions of Texas during the latter part of the month. Total aggregated insured losses were estimated to exceed $1 billion.

In Asia, Cyclone Roanu brought torrential rainfall to Sri Lanka, eastern India, Bangladesh, Myanmar, and China during May. Widespread flooding and landslides ensued and at least 105 people were killed in Sri Lanka alone.

Nearly 125,000 homes and structures were damaged or destroyed across all five countries. The estimated cost of reconstruction was up to SLR250 billion ($1.7 billion), though insured losses were substantially less given low insurance penetration.

Five separate instances of flooding impacted China in May also, as aggregated economic losses topped $1.5 billion. Most of the damage was attributed to agricultural interests.

Major flooding and landslide events in were also seen parts of Hispaniola, Kenya, Tajikistan, Afghanistan, Rwanda, Ethiopia, India and Yemen.

Tropical Storm Bonnie brought heavy rainfall to portions of the Carolinas and Georgia in the United States at the end of May and into June. Total economic losses were expected to be minimal.

Earthquakes in Ecuador and China caused damages to thousands of homes and a winter weather outbreak in northern China caused damage to crops totaling $61 million.