European windstorms in January to result in $2bn+ industry loss: Aon

by Artemis on February 8, 2018

European windstorms that impacted western and central Europe during the month of January are expected to cause an insurance and reinsurance industry loss of at least $2 billion, according to data from Aon Benfield’s Impact Forecasting unit.

Storm Burglind Eleanor damageAtlantic storms tore through Europe in January, as windstorms Friederike, Eleanor and Carmen killed at least 20 people and caused widespread damage and losses to insurable interests.

Windstorm Friederike was the most impactful of the storms, reinsurance broker Aon Benfield’s catastrophe risk unit Impact Forecasting said, with more than 13 people killed after hurricane-force wind gusts and heavy rainfall struck Germany, the Netherlands, Belgium, France, and the United Kingdom.

The German Insurance Association (GDV) had reported that Friederike was the costliest windstorm to strike the country since Windstorm Kyrill in 2007, saying that preliminary payouts had reached approximately EUR1 billion ($1.24 billion).

Additional payouts for windstorm Friederike exceeded EUR100 million ($125 million) were by other insurance groups and organisations in the affected region, while the overall economic loss from the storm was even higher, Impact Forecasting said.

AIR Worldwide had said that the insurance and reinsurance loss from windstorm Friederike could reach as high as EUR 2.6 billion.

Windstorms Eleanor and Carmen also struck western and central Europe in January, with at least seven deaths caused and notable damage suffered in the UK, Ireland, France, Germany, and Switzerland. Impact Forecasting said that preliminary insured losses from these storms were listed in the hundreds of millions of Euros.

AIR Worldwide put the industry loss from Eleanor, also known as Burglind, as high as $1.92 billion. Windstorm Carmen, also known as Ingmar has likely only caused a EUR 100 million or so of losses we understand.

There was one other European named storm, Helene, or Georgina, which hit the UK, Ireland and Norway right at the end of January, but so far no estimate is available for losses from that storm. PERILS AG is investigating this and the other storms.

Michal Lörinc, analyst with Impact Forecasting’s Catastrophe Insight team, commented, “A meteorologically active January resulted in elevated windstorm losses in Europe. When looking at the combined effect of storms Friederike, Eleanor and Carmen, windstorm-related economic and insured losses in Europe are already comparable to the annual totals recorded throughout 2017. The busy stretch of storms allowed Impact Forecasting to deploy its European windstorm model and help clients better capture the expected loss impact from each event in real-time.”

So an active January is perhaps the most costly single European windstorm month in a few years, as it has been some years since Europe has experienced such activity.

Impact Forecasting explained that other major natural disaster events that occurred elsewhere during January included:

  • A powerful storm system and significant cold impacted much of the central and eastern United States during the first week of January, killing at least 22 people. Total economic damage was estimated at USD1.1 billion, while public and private insurers were expected to pay up to USD750 million in claims.
  • Numerous areas of low pressure and extended periods of frigid temperatures affected Northern and Eastern China. The greatest impacts were noted to the agricultural sector in Jiangsu, Anhui, Hebei, and Hunan. The Ministry of Civil Affairs (MCA) cited winter weather damage of at least USD1.8 billion.
  • Additional wintry weather led to casualties and damage in Japan, India, Nepal, Canada, and Lebanon.
  • Heavy rainfall swept across the state of California, prompting flash flooding, mudslides and debris flow in areas previously impacted by major December 2017 wildfires, killing at least 21 people. An official assessment from Cal Fire cited that 129 single family residences and six commercial properties were destroyed and another 307 homes and 17 commercial properties were damaged. Total economic damage was expected to reach well into the hundreds of millions (USD).
  • Persistent heavy rainfall recorded in Northern and Eastern France led to flooding along multiple rivers and streams, with some of the most notable impacts occurring in the Île-de-France region. Preliminary damage assessments suggested that the cost of the current flooding may reach the hundreds of millions (EUR).
  • Other flood events were noted in Canada, Democratic Republic of Congo, Mozambique, and Philippines.
  • Two powerful cyclones in the South West Indian Ocean led to widespread damage. Cyclone Ava left at least 73 people left dead or missing in Madagascar, while Cyclone Berguitta caused extensive damage in Mauritius and La Reunion.
  • A magnitude-7.1 earthquake struck just offshore Peru’s northern coast on January 14, killing at least two people, injuring 137 others, and damaging or destroying 2,541 homes and other structures.

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