AIR: European windstorm Christian insured losses €1.5 billion to €2.3 billion

Risk modelling firm AIR Worldwide has become the first of the risk modellers to provide an estimate for insured losses resulting from the recent European windstorm Christian. AIR gives an estimated range of insured losses of €1.5 billion to €2.3 billion.

AIR said that it believes that the majority of insured losses from Christian will come from Denmark and Germany, where wind speeds were highest. Significant insured losses will also come from the UK, the Netherlands, France and Sweden.

“Windstorm Christian smashed into southern Britain on Monday, October 28, knocking down trees, flooding lowlands, and disrupting travel over land, sea, and air,” commented Gerhard Zuba, senior principal scientist at AIR Worldwide. “Gusts of 160 km/h (100 mph) were reported on the Isle of Wight in southern England, and waves greater than 7.5 meters (25 feet) were reported elsewhere along the coast.”

Windstorm Christian (or St Jude as the storm is known in the UK) is very early for a European windstorm, with the season generally thought to begin in earnest in December.

Dr. Zuba added; “October is usually a quiet month for windstorms in Europe. Nevertheless, the overall atmospheric conditions were favorable for storms to impact the UK and northern Europe. The damage from storms during this time of year can be more severe than storms that develop later because many trees still have leaves on their branches, making branches more likely to break off and become airborne missiles, and also making trees more likely to topple. Further, Christian, powered by the temperature gradient between cold polar air and warm subtropical air, strengthened as it traveled over the UK, France, Belgium, the Netherlands, and Germany.”

“Christian produced record-setting wind speeds at several meteorological stations, but the total wind damage was less severe than that from the previously mentioned historical storms. This was a result of Christian’s smaller wind footprint and its passage over areas with fewer exposures,” Dr. Zuba continued.

While AIR expects the size of individual claims to be relatively low, the overall volume of claims is expected to be significant due to the large size of the area affected. AIR expects that the industry insured loss in Denmark will be the highest, followed by Germany, the Netherlands, France, and the UK.

AIR said that its loss estimates reflect:

• Insured physical damage to property (residential, commercial, industrial, agricultural, auto), both structures and their contents.
• Losses to insured forestry in Norway, Sweden, and Finland

Loss estimates do not reflect:

• Business interruption and additional living expenses (ALE) for residential claims, for all modeled countries except the UK
• Losses to uninsured properties
• Losses to infrastructure
• Losses from non-modeled perils, including coastal surge and inland flooding
• Demand surge (AIR’s demand surge function is not triggered by this event)

Looking at the estimates that have come out to date, €1.5 billion to €2.3 billion from AIR (so a midpoint of €1.9  billion), €800m and €1.3 billion from Willis Re (a midpoint of €1.05 billion) and $1.7 billion to $2.9 billion from Credit Suisse (a midpoint of $2.3 billion or €1.7 billion), gives us a range of €1.05 billion to €1.9 billion if we take those mid-point’s, for a conservative view. The midpoint of that range sits at €1.475 billion which would seem eminently  for losses to reach and actually comes out below the bottom end of AIR’s estimate.

That just goes to show the huge range in early loss estimates that get published. It could be some weeks before we get something more accurate to go on for windstorm Christian.

Read our earlier articles on Christian:

– Willis Re: Europe-wide windstorm Christian insured loss €800m to €1.3 billion

– Windstorm Christian insured losses $1.7bn to $2.9bn estimates Credit Suisse

– Willis Re: UK insured losses from windstorm Christian £300m to £500m

– Plenum: No impact expected to cat bonds from European windstorm Christian

– PERILS to assess European windstorm Christian loss potential

– European windstorm Christian threatens UK and northern Europe