EYE OF THE STORM: DATA MODELLING BRINGS NEW HOPE FOR FLOOD-PRONE HOMES
From Canada’s Hailstorm Alley to the typhoons of the Pacific, there are some places where property insurance will always be tough
It is impossible to immunise yourself completely from weather-related disasters, especially in an era when extreme weather events are occurring with unprecedented frequency and ferocity. That said, there are some corners of the world with a record for particular kinds of weather-related risks and here are some of the worst.
Tornado Alley, Oklahoma
Running roughly along the Interstate-44 highway connecting Oklahoma City and Tulsa, this is ground zero for a large proportion of the 1,200 or so tornadoes that the US experiences annually. On a single day in May 1999, no fewer than 70 twisters hit Oklahoma City and its environs, destroying 1,700 homes and damaging thousands more. Lloyd’s, the London’s insurance market, pegged the value of insurance losses at $400m.
Hurricane capital, Grand Cayman
The Caribbean finance centre is buffeted or hit squarely by a hurricane once every 2.16 years, more than any other Atlantic locale. The island’s residents still shudder at the memory of Hurricane Ivan, a storm that destroyed 70 per cent of its buildings. Cayman’s insurer faced losses estimated at $108m, but wasn’t able to meet the full amount owed.
Ice storms in Canada
Major ice storms pummel the area around Montreal, Quebec City and Ontario every few years; the city of Toronto lost power in 2013 (costing insurers Can$200m) and again in 2015. One of the worst was the ice storm of 1998, when dozens of people died in both Canada and the US, wiping out power lines and costing the Canadian insurance industry Can$1.4bn.1
A new report from Climate Central found that California has an average of three more large wildfires each year than it did during the 1970s. Two of last year’s most destructive fires alone cost insurers $1bn and some, like Allstate, have stopped writing homeowner policies for the 2m households considered most at risk.
Deadly typhoon storms wreak havoc from Bangladesh and Myanmar all the way to China and Japan. It is in the last that insurers take the biggest hit, according to catastrophe modellers, since Japan gets a total of 26.7 typhoons annually. Here some of the most powerful storms collide with high-value insured infrastructure.
Canada’s Hailstorm Alley
A part of Canada’s western province of Alberta – that ranges from near the US border, through the country’s oil production capital of Calgary and to the Rocky Mountains – has earned the unwelcome nickname of “Hailstorm Alley”. It is thanks in part to a 2010 storm that pounded Calgary with hailstones 4cm in diameter. In August 2014, southern Alberta recorded the country’s most expensive hailstorm with Can$450m in insurance claims. The frequency and severity of such hailstorms is increasing.