PERILS AG, the provider of industry-wide European catastrophe exposure, industry loss data and indices, is actively looking into this weekends UK windstorm Desmond to see whether it deserves full investigation as either a wind or flooding event.
PERILS is already investigating one European windstorm event from this extra-tropical storm season. Windstorm Nils, also known as Clodagh in the UK and Ireland, or Gorm in Sweden, struck northern Europe beginning the 29th November 2015, with impacts felt across Ireland, the UK, Germany, Denmark, Norway and Sweden.
PERILS places a storm officially under investigation if it believes that the event has the potential to cause €200 million of insurance industry losses, or greater. PERILS data is used by a range of reinsurance related transactions, from catastrophe bonds to industry loss warranties (ILW’s), as well as alongside risk models.
The fact that windstorm Nils (Clodagh) has been officially placed under investigation suggests that this storm has the potential to breach the €200 million insurance industry loss limit.
So onto Desmond, again the new UK and Ireland naming convention for the storm that struck over the weekend causing significant flooding in the north-western UK. Storm Desmond is also known as Ted (Germany), Helga (Denmark) and Synne (Norway).
At this time PERILS is still looking into storm Desmond to see whether it requires a full investigation.
Update 8th December 2015: PERILS AG has now placed the Cumbria UK flooding event officially under investigation.
Given the €200 million threshold for reporting on event losses that PERILS follows though, it would certainly seem possible that Desmond could become the second investigated windstorm event of the 2015/16 winter storm season.
The flooding impact from Desmond has been fairly significant in some areas of northern England, while the impact from winds was perhaps higher further north in Scotland and also in Ireland.
PERILS said that while so far it has not decided whether to classify Desmond as officially under investigation, if it does so it is currently more likely to be as a UK flood event, rather than wind. PERILS began covering UK flood losses, in addition to European windstorms, in 2012.
Defining whether losses are likely to come from wind or flood is not always easy however, so it may take PERILS a few days to establish whether storm Desmond deserves full investigation and as what type of loss event.