Munich area hail storm to drive hundreds of millions in losses: Actuaries

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The Munich area of Germany was hit by a severe storm on Monday this week, resulting in torrential rain, strong winds and hail stones the size of golf balls and larger, which is expected to leave a financial impact to the insurance and reinsurance sector of hundreds of millions of Euros.

Hail stonesThe storm swept in across the region close to the main city areas of Munich, but the eventual track of the low pressure system meant that damage was not as severe as it could have been, according to actuarial consultancy Meyerthole Siems Kohlruss (MSK).

While rainfall of as much as 10mm was recorded in just a matter of 9 minutes, while strong winds reached 118 km/h and hail stones of golf and tennis ball sizes seen, the fact the storm tracked a little further west of the main city area has perhaps saved insurance and reinsurance interests from a much larger loss.

“A slightly east-lying track would have caused much higher damage,” MSK Managing Director Onnen Siems said, further explaining that “The Holiday and the holiday season also had a reducing effect” in the damage and disruption seen.

A supercell thunderstorm crossed the western outskirts of Munich in the late afternoon on Monday, from the Allgäu region of Bavaria and then moved on towards Regensburg, driving the severe weather with it.

According to MSK, the majority of the damage caused by the severe convective weather system was experienced within a roughly one hour period in the Munich area.

The actuarial firm estimates that the insured property damage will amount to an industry loss in the mid-three digit million Euro’s, suggesting something around the EUR 400 to 600 million range perhaps.

MSK highlights that this hail storm comes some 35 years after a major loss event hit the Munich area.

The so-called “Münchener Hagelereignis” struck the city on July 12th 1984 and caused a roughly EUR 750 million insurance and reinsurance market loss at the time, which is around EUR 2 billion today.

Vehicle damage accounted for roughly 60% of the losses from that storm.

With this weeks Munich hail storm having struck during the Pentecost holiday period the city was less busy than it could have been, which has helped to reduce the impacts.

In addition the track to the west of the city center has also helped to save insurance and reinsurance interests from a potentially much larger loss event.

But hail and convective storms in Germany are increasingly featuring in the summer months, raising the need for robust risk management and reinsurance around property insurance business in the country.

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