Karen Clark & Company, the Boston-based American catastrophe modelling firm, said earlier this week that insured losses from a flurry of devastating tornadoes alongside torrential storms that wreaked havocs in parts of the United States this month, could total up to $3 billion, while other industry experts claimed a barrage of storms that swamped at least six US states could cost insurers up to a whopping $5 billion.
Government officials said in a statement on Monday that a clutch of catastrophic tornadoes that torn apart a 200-mile path across the US Mideast and South, thrashing business and houses, killed at least 74 people. On top of that, New York-based American multinational credit rating agency Fitch was quoted saying that insured costs could soar up to $5 billion, mirroring the US Mideast events in August last year, however, insurers’ expenses would be much-lower than those of Hurricane Ida and Winter Storm Uri which costed about $40 billion and $15 billion respectively.
Winter tornadoes to cost insurers roughly $5 billion
Adding that a latest leg of winter weather-driven losses in insurers was highly unusual, Fitch said in a statement, “The tornadoes will likely drive insurance industry natural catastrophe losses to the largest annual total in the U.S.
since the 2017 record year (approximately $130 billion)”. The New York-based credit rating agency also told that this year’s consecutive winter storms could be stemmed from climate changes. More importantly, the winter tornado-driven unprecedented losses in US insurers would more likely to prompt further rate-hikes during January 2022 pricing renewals, added Fitch.