The insurance and reinsurance industry loss estimate for the combined market-wide impacts of European windstorms Dragi and Eberhard has been raised by 8% to roughly EUR 798 million (US $900m).
This still sits below the market expectation that these two windstorms that struck Europe on March 9th and 10th 2019 would cause a combined impact of over EUR 1 billion, which would be closer to US $1.15 billion.
The estimates from industry loss data provider PERILS AG are based on data collected from insurance firms operating in the regions affected.
PERILS had originally pegged the loss at EUR 740 million with its first estimate back in April.
Dragi had been the weaker of the two low pressure storm systems that tracked towards Europe and struck on 9th March 2019, immediately followed by Eberhard on 10th March, with each affecting a similar area across the British Isles, France, the Benelux states, Germany and Switzerland.
Initial estimates had suggested a much higher toll from the more powerful storm Eberhard, with a modelled loss estimate suggesting up to EUR 1.5 billion from AIR Worldwide, while Eberhard was also estimated to have caused as much as EUR 600 million of insured property damage in Germany alone by actuaries.
That left the market anticipating a billion Euro plus loss from these storms, which could have had the potential to affect certain reinsurance contracts or at least eat into aggregate layer retentions.
Given the difficulties in allocating specific insured losses to storm systems that occurred so close together, PERILS loss estimate figure combines the impacts from both events.
But still it falls some way short of where the market had assumed this loss would lie, which will be a relief for some insurance and reinsurance markets.
Despite being smaller than expected, the Dragi-Eberhard insurance market loss is the largest in another otherwise benign 2018/2019 European winter storm season.
The European property insurance market has not suffered a really significant European windstorm loss, or other natural catastrophe event, for a number of years now. This has amplified the pressure on reinsurance pricing in the region, resulting in the very soft market that has proved unattractive to many ILS players.
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