Severe winter weather and extreme cold are set to drive minimally hundreds of millions of dollars of insurance and reinsurance losses across parts of Europe in late February into the start of March, as well as across the United States northeast from the latest nor’easter winter storm to strike that region.
According to Impact Forecasting, the catastrophe risk modelling and analysis division of reinsurance broker Aon Benfield, the two periods of severe winter weather are each likely to cause financial and insurance industry losses in the hundreds of millions of dollars, perhaps higher, as winter went out with a bang in both regions.
Impact Forecasting said that an outbreak of cold, arctic air as well as extratropical Storm Emma both impacted a large area of Europe in the second half of February and into early March, with temperatures falling to some of their coldest levels in decades.
Both freezing conditions and unusually heavy snow and freezing rain accumulations were reported by countries, including the United Kingdom. Flight cancellations and business interruption were widespread, which will exacerbate insurance and reinsurance claims, while local governments in Europe also reported at least 88 fatalities from the cold snap.
Impact Forecasting says that the European freeze and snow is set to cost well into the hundreds of millions of USD, including business interruption, though it notes the final figure is expected to very likely be higher than that, also noting the high volume of filed insurance claims reported.
Then, just in the first few days of March, the United States saw its own reminder of winter, with a significant Nor’easter storm that spawned hurricane-force wind gusts, heavy snowfall, torrential rain, and coastal flooding to much of the U.S. East Coast from March 1st to 3rd.
Impact Forecasting explained that at least nine people were killed in the winter storm, with states of emergency declared in Massachusetts, New York, Virginia, and Maryland due to widespread wind and storm surge damage.
As well as direct property damage caused, business interruption is also expected to drive insurance and reinsurance losses from this spell of severe winter weather.
Impact Forecasting estimated that total economic and insured losses would reach well into the hundreds of millions (USD) from this event as well.
The European and U.S. winter weather outbreaks of the last fortnight could between them drive over $1 billion of insurance sector losses, providing a reminder of the impacts severe winter storms can have.