Preliminary economic impact of Nepal earthquake may reach $5bn

Losses from disaster could equal as much as 25% of Nepal's GDP

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May 07, 2015, 11:28 ET

CHICAGO, May 7, 2015 /PRNewswire/ -- Impact Forecasting, Aon Benfield's catastrophe model development team, today launches the latest edition of its monthly Global Catastrophe Recap report, which evaluates the impact of the natural disaster events that occurred worldwide during April 2015. Aon Benfield is the global reinsurance intermediary and capital advisor of Aon plc (NYSE:AON).

The report reveals that a magnitude-7.8 earthquake struck Nepal during the month, killing as many as 10,000 people and causing catastrophic damage throughout Nepal, India, China, and Bangladesh. Preliminary economic losses were expected to reach and possibly exceed USD5.0 billion – which would equal to at least 25 percent of Nepal's gross domestic product (GDP) – with very low insurance penetration in the region. Government figures revealed that more than 700,000 homes and other structures were damaged or destroyed by the earthquake, as well as dozens of historical sites.

Adityam Krovvidi, Head of Impact Forecasting Asia Pacific, said: "While the level of damage and casualties was enormous, the seismological magnitude of the event in the Indo Nepal region was not unexpected. Scientists have been warning about a major event resulting from the 'central seismic gap' in the Himalayan fault system since the 1934 event. Unfortunately for the earthquake peril, timing is always the greatest unknown factor. The vulnerability of buildings and structures in Nepal poised a significant risk given the absence of good seismic code history and implementation practice. Impact Forecasting has already developed an earthquake scenario model for Nepal, which it released at its Singapore conference this week, and is planning to send a team of seismic and vulnerability experts to conduct a reconnaissance study. Our findings will be published in the coming months."

United States severe thunderstorm activity increased significantly in April, with five separate events impacting central and eastern areas of the country. Dozens of tornadoes touched down, with parts of the Plains, Midwest, Southeast, Mid-Atlantic and Southeast sustaining the worst damage. Total combined insured losses were expected to reach USD2.0 billion, including more than USD750 million from one event alone. Despite an active month for U.S. tornadoes (185), the annual total remained at a historically low level.

Also occurring in April:

Severe weather in Australia caused significant damage in the states of New South Wales and Queensland. The Insurance Council of Australia estimated insured losses would near USD350 million.
In China, four severe weather episodes caused widespread damage to properties and crops leading to aggregate economic losses of almost USD1.0 billion.
A rare F2 tornado prompted considerable damage in the Brazilian town of Xanxere, killing two people.
Chile's Calbuco volcano erupted three times and led to the evacuation of at least 6,500 residents. The eruptions were expected to cost the local economy up to USD600 million.
Torrential rainfall caused widespread flooding and landslides throughout parts of Brazil, Afghanistan, Haiti, Kazakhstan, and Kenya. In total, more than 100 people were killed.
Major wildfires engulfed parts of Russia's southern Siberia, killing at least 33 people and destroying nearly 1,500 homes. Total economic damages were listed at USD140 million.
A stretch of wintry weather caused heavy crop damage in eastern China. Unseasonably cold temperatures left vast areas of crops destroyed, with total damages recorded at USD174 million.

To view the full Impact Forecasting April 2015 Global Catastrophe Recap report, please follow the link:

http://bit.ly/1DSVovC

Along with the report, users can access current and historical natural catastrophe data and event analysis on Impact Forecasting's Catastrophe Insight website, which is updated bi-monthly as new data become available:

www.aonbenfield.com/catastropheinsight

Further information

For further information please contact the Aon Benfield PR team: Andrew Wragg (+44 207 522 8183 / 07595 217168) David Bogg or Alexandra Lewis

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