Home Uncategorized Baja California quake causes USD 1 billion economic loss in Mexico

Baja California quake causes USD 1 billion economic loss in Mexico

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Aon Benfield, the world’s premier reinsurance intermediary and capital advisor, today releases its latest Monthly Cat Recap report, which provides an analysis of global natural perils in April.

Published by the Impact Forecasting team, Aon Benfield’s catastrophe model development center of excellence, the report highlights that a series of earthquakes in Baja California dominated United States natural hazard activity in April. The epicenter of the main earthquake was 11 miles west-southwest of Guadalupe Victoria in Mexico and the Mexican town of Mexicali was hardest hit by the event, with 25,000 residents left homeless and two people killed.

Economists in Mexico estimated the economic damage to be greater than MXN12.3bn (USD1bn), and insured losses more than MXN3.7bn (USD300mn). The earthquake was also felt in Southern California, where the town of Calexico was most affected with total economic losses across Imperial County, California, estimated at USD91mn.

Steve Jakubowski, President of Impact Forecasting, said: “The Baja California earthquake was of magnitude 7.2, which makes it a strong quake and one that was felt throughout northwestern Mexico. It also impacted southern California, but economic losses, insured losses and loss of life or injury were far lower due to a lower population density and more robust structures. This event is also a reminder that, based on historical activity, California is overdue for a significant earthquake.”

The Recap report states that Asia suffered a series of natural perils in April. Severe thunderstorms killed more than 137 people in eastern India and Bangladesh, damaging or destroying in excess of 200,000 homes and leaving at least one million people homeless – possibly the greatest number of people ever to be left homeless as a result of thunderstorm.

In China, a strong earthquake in Qinghai Province killed at least 2,220 people, injured more than 12,000 others and damaged or destroyed 25,000 structures, while heavy rainfall in Hunan Province and southern China led to several deaths and the destruction of thousands of homes. A fierce sandstorm in Gansu Province damaged more than 1,000 homes as well as more than 206,800 hectares (511,000 acres) of crops.

Additionally, a magnitude-7.7 earthquake in Northern Sumatra, Indonesia injured at least 62 people and damaged more than 1,000 homes. Meanwhile, in Europe the eruption of a volcano under an Icelandic glacier mid-month proved to be one of this year’s most disruptive and costly natural hazards.

While there was no loss of life or known damage from the event, a plume of ash emanating from the volcano resulted in the cancellation of 102,000 flights globally and extensive disruption for more than seven million travelers. With airplanes remaining grounded over a period of days, airlines’ lost revenue was estimated at EUR2bn (USD2.6bn), while insurance losses were relatively very minor – forecast at EUR7.4mn (USD10mn).

In South America, heavy rains inundated northeast Peru, killing at least 28 people and injuring 54 others. Meanwhile, the heaviest rains in 48 years led to severe flooding in Brazil, killing 256 people and injuring hundreds more, and causing an estimated economic loss of BRL370mn (USD207mn). And in Western Australia, a magnitude-5.2 earthquake damaged at least 80 buildings and precipitated a AUD5mn (USD4.6mn) relief effort to restore damaged heritage-listed structures.