Wednesday, February 12, 2014
Hurricanes get the headlines, but tornadoes are stealing their thunder. The economic toll of tornadoes and severe thunderstorms is adding up – to the tune of an average $9.6 billion per year payout in insurance claims. I.I.I.’s CEO/President Dr. Robert Hartwig made that point clear at the National Tornado Summit held this week in Oklahoma City.
Dr. Hartwig’s presentation on tornadoes and the insurance trends for severe convective events noted that tornadoes account for 36 percent of all insured losses since 1993; hurricanes losses over that time period were a just over 40 percent. He pointed out that areas in the heart of “Tornado Alley” may have 20-25 severe weather days each year. But, it’s not the number of storms that matters most. It’s all about where they hit.
Tornadoes are part of the landscape in many areas of the U.S., and the landscape has changed. If a tornado touches down on farmland, there may be little to no structural damage, and no witnesses to record the event. Today, what was once farmland is dense suburban development, putting more people and more property in a twister’s path — and bringing more devastation.
Average insured losses from thunderstorms are up seven fold since the 1980s. Historically, Oklahoma is second to Texas in terms of losses from tornadoes, thunderstorms and hail. The tornado that hit Moore, Oklahoma in May 2013 was the costliest storm of the year. At the Tornado Summit, Moore’s Mayor said he expects 85 percent of Moore residents will rebuild. That’s insurance at work!
To help spearhead the rebuilding of schools in Moore, Dr. Hartwig presented the Moore Public Schools with a check for $10,000 following his presentation at the Summit. He reminded the audience that knowing the numbers associated with natural disasters is a small part of the story. It’s helping the people impacted that matters most to the insurance industry. The I.I.I.’s contribution on behalf of the insurance industry underscored the human factor of disaster recovery, and that reminder earned a standing ovation.