February saw some reasonable sized losses from severe weather events in Europe and the United States, according to insurance and reinsurance broker Aon, with industry losses from the month expected to eclipse US $2 billion and European windstorm activity taking the seasonal loss to more than $3 billion.
First, European windstorm Ciara (also known as Sabine), which Aon says is likely to result in an insurance and reinsurance market loss of “well above EUR1 billion (USD1.1 billion),” the majority of which occurred in Germany.
European windstorm Ciara – Sabine is the costliest single storm event in Europe since 2018 Aon believes, with significant impacts seen across 17 separate European countries, with most of the losses coming from wind-related damage incurred to property and automobiles.
As we explained before, AIR Worldwide estimated that storm Ciara, or storm Sabine as it was named in Germany, would result in an insurance or reinsurance industry loss of between EUR 1.1 billion and EUR 1.9 billion, the top-end of which is almost US $2.1 billion.
While fellow catastrophe risk modeller RMS said that the loss from the windstorm would be up to EUR 1.8 billion.
Michal Lorinc, Catastrophe Analyst for Aon’s Impact Forecasting team, commented on the storm, “February was a meteorologically active month for windstorms in Europe, as no fewer than six notable storms traversed western and central sections of the continent. The most significant was Windstorm Ciara (Sabine), which affected 18 nations and became the costliest storm since Friederike in 2018.
“Insurers have now noted nearly USD3.0 billion in payouts from the 2019/20 season, which is above this century’s average for the peril though far smaller than peak years in 1990 and 1999. Despite being manageable for the industry, the elevated losses continue to serve reminder that robust risk management remains imperative and reliable catastrophe modeling solutions can help with those initiatives.”
While the latest European windstorm industry loss is above average for the peril, it remains far too low to impact reinsurance pricing for the market which is already artificially depressed by the weight of traditional reinsurer capacity targeting the region.
Also in February, severe thunderstorms and related perils of high wind, snow and flooding impacted the United States and are expected to drive insurance and reinsurance market losses of more than US $800 million, according to Aon.
At least 37 tornadoes were confirmed to have touched down, with the hardest hit region in terms of physical damage being the Southeast – including Mississippi, Alabama, Kentucky, Georgia, South Carolina, and North Carolina.
Total economic losses were estimated at more than US $925 million, Aon said, with insured losses of more than US $675 million. Aon believes February’s sever thunderstorm activity alone will drive over US $800 million of industry losses.