March 25th, 2009

2008 Nat Cat Event Summary, Part II

Posted at 1:00 AM ET

hurricaneCaroline Gray, Instrat®
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Event summaries are listed in chronological order.

Earthquake in China

A powerful earthquake struck southwest China on May 12, causing widespread shaking, serious damage, and tens of thousands of fatalities. The magnitude 7.8 earthquake was located approximately 61 miles (98 kilometers) northwest of Chengdu in Sichuan Province, according to the US Geological Survey (USGS). The USGS added that the earthquake was centered approximately 6.2 miles (10 kilometers) underground. Authorities reported that close to 5 million houses were destroyed, and both Munich Re and Swiss Re have classed the earthquake as the second deadliest catastrophe in 2008 - with Munich Re reporting 70,000 confirmed fatalities.

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Hazard data illustrated in the CAT-i map was taken from i-aXs®, Guy Carpenter’s web-based risk management platform. Please contact your broker or Instrat® representative for assistance or go to www.i-axs.info for further information.

State media said the worst of the damage was centered in the Sichuan Province, with the counties of Wenchuan and Baichuan affected particularly badly. Across the region, homes, schools, hospitals, and chemical plants were reported to have been destroyed. Just east of the epicenter, thousands were killed in Beichuan, including more than 1,000 students and teachers at a school in Beichuan County. The school building collapsed and an additional eight schools and a hospital crumbled in Dujiangyan City, according to state media. It was also reported that eight power plants were shut down after the earthquake, although many reopened fairly quickly.

Reports said the earthquake was the most powerful to hit China in 30 years, and more than 150 aftershocks above magnitude 4 were recorded. The earthquake was the worst to hit China since 1976, when 242,000 people were killed in the northern city of Tangshan.

The State Expert Commission in China said the earthquake brought about a direct economic loss of 845 billion Yuan (USD123 billion). According to Munich Re, the economic loss from the earthquake was USD85 billion although the insured loss from the event was a fraction of this at USD300 million.

Severe Weather in the U.S. Midwest

Severe weather in the U.S. Midwest spawned more than 150 tornadoes from May 22 to May 26, causing widespread property damage and killing several people. The powerful storms brought large hail and heavy rain to the region, with Iowa, Minnesota, Kansas, and Oklahoma badly affected.

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Hazard data illustrated in the CAT-i map was taken from i-aXs®, Guy Carpenter’s web-based risk management platform. Please contact your broker or Instrat® representative for assistance or go to www.i-axs.info for further information.

Some of the worst damage occurred in Iowa, where Governor Chet Culver issued a disaster proclamation to four counties (Butler, Black Hawk, Buchanan, and Delaware). Seven people were killed and hundreds of buildings destroyed when a tornado of EF-5 intensity ripped through a stretch of the northern part of the state, hitting the towns of Parkersburg, New Hartford, and Dunkerton. Five of the deaths occurred in Parkersburg, with two others in the nearby town of New Hartford. The tornado was described as the strongest to hit the state in 32 years and caused extensive damage. More than 200 houses and 21 businesses were destroyed. In Minnesota, a tornado of EF-3 intensity hit Anoka County on May 25, resulting in the death of a small child and eight other injuries - not to mention the destruction of more than 50 homes.

Federal disaster aid was approved for Colorado on May 26, after several tornadoes tore through several northern communities. Tornadoes that struck Weld and Larimer counties on May 22 killed one person and destroyed or damaged homes, vehicles, livestock, and crops. Central and western Kansas also suffered, as a reported 15 tornadoes touched down in the state from May 22 to May 23. One of these was reported to be a powerful EF-4 tornado on May 23 in the area of Quinter.

A report published by the National Climatic Data Center (NCDC) suggests that the United States experienced 2,192 tornadoes in 2008 (not yet confirmed) - well above the 10-year average. There were 36 severe tornadoes (intensities between EF-3 and EF-5) and 125 deaths associated with tornadoes in 2008, according to the report. In May, more than 460 tornadoes were reported, making it the third most active May ever recorded. The first five months of 2008 was the eighth deadliest period for tornado-related deaths: 112 fatalities were reported. February had the highest number of fatalities, with 59 deaths reportedly related to tornadoes.

According to estimates in the latest PCS report, the severe weather caused USD850 million in insured losses. The worst affected state in this report was Minnesota, which suffered almost half of all losses from this event. Other states that incurred damage exceeding USD100 million were Colorado (USD200 million) and Iowa (USD160 million).

Previous installments in this series:

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Guy Carpenter’s Instrat® department provides CAT-i reports for major natural catastrophes worldwide. These reports cover catastrophes including worldwide tropical cyclones, earthquakes, major UK and European floods and any other natural event that is likely to incur a significant loss to the (re)insurance industry. Please email CAT.i@guycarp.com if you wish to be added to the free email distribution list.

Instrat also provides RISK-i reports for major technological or man-made events worldwide. These reports cover risks to property, transport and life including explosions, fires, crashes, engineering disasters and terrorist attacks that are likely to incur a significant loss to the (re)insurance industry. Please email RISK.i@guycarp.com if you wish to be added to the free email distribution list.

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