Storm Friederike industry loss nears €1.7bn, 77% of economic loss insured

The estimate for insurance and reinsurance industry losses caused by extratropical cyclone, or European windstorm, Friederike (David), has been increased by another 3% to EUR 1.675 billion, which suggests that roughly 77% of the economic impact from the windstorm was insured.

European windstorm Friederike struck the northern areas of Europe in January 2018, causing significant property damage as it tracked across countries including the British Isles, Belgium, the Netherlands and Germany on 17th and 18th January.

Catastrophe risk data and industry loss estimate provider PERILS gave an initial estimate for the industry loss from windstorm Friederike of EUR 1.465 billion (approximately US $1.8 billion) in late February, 2018, with that figure then rising by 11% to EUR 1.629 billion back in April at the next estimate update.

Now, at the third estimate, PERILS has increased it again by 3% to EUR 1.675 billion, a figure which is closely aligned with the estimate from German reinsurance firm Munich Re, which put it at EUR 1.7 billion.

Munich Re had also estimated the economic impacts of windstorm Friederike, putting them at EUR 2.2 billion, hence it appears that roughly 77% of the economic loss has been covered by insurance, which the reinsurer said was reflective of a “high insurance density of windstorm cover in Europe.”

Friederike’s winds were particularly strong in the Netherlands and Germany, where a record gust of 203km/h was registered on the Brocken mountain in the state of Saxony-Anhalt. As a result the region experienced severe damage and disruption, bringing a number of states in both the Netherlands and Germany to a halt.

PERILS said that the total insurance and reinsurance market loss from Friederike is the highest European windstorm industry loss since winter storm Klaus hit France on 24th January 2009.

But PERILS own data actually shows that the industry loss from Klaus was EUR 1.574 million at the time of reporting, so in fact Friederike is the largest windstorm industry loss to hit Europe since 2007’s Kyrill it seems, based on reported industry loss estimates at the time of the events.

European windstorm loss events have certainly been frequent in recent years, but the overall size of them has not been particularly impactful to the reinsurance industry.

We understand that in the case of Friederike there was an element of reinsurance capital including some programs that had participation from ILS funds which faced small levels of loss erosion, but that the majority was retained and dealt with by major regional re/insurers.

Also read:

– Storm Friederike industry loss rises 11% to EUR 1.629bn ($2.02bn).

– Storm Friederike loss over €1.14bn in Germany & Netherlands alone.

– Windstorm Friederike industry loss from EUR 1.3bn to 2.6bn: AIR.

– Storm Friederike insured loss put at EUR 800m in Germany: Actuaries.