The recent UK flood event, which struck in the last few days in the northwest largely affecting Cumbria, has now been officially placed ‘under investigation’ by insurance and reinsurance industry loss data aggregator PERILS AG.
As we wrote yesterday, PERILS AG, the provider of industry-wide European catastrophe exposure, industry loss data and indices, has been looking into the UK flooding to see whether the impact to the insurance and reinsurance industry was likely to exceed the event reporting threshold of €200 million.
Now, we understand that PERILS AG has classified the Cumbria Floods as an event to be investigated, suggesting it believes that the insurance industry impact is likely to be near or exceed €200 million.
The flooding, which is an ongoing event in parts of the northwest UK, was caused by a European windstorm known in the UK and Ireland as Storm Desmond and also known as Ted (Germany), Helga (Denmark) and Synne (Norway).
It’s too early to estimate loss from the floods, however industry sources have been suggesting that the floods in Cumbria could result in a similar level of losses as was seen in Carlisle in the north of England in 2005. That event cost insurers around £270 million.
The flooding in Cumbria is concentrated and affects both rural areas and towns. The business interruption factor could help to raise the ultimate level of losses faced by insurance and reinsurance companies.
Risk modelling firm RMS said this morning that while it is too early to forecast the insured losses from this flood event, the losses could be greater than flooding which struck in Cumbria in 2009, which the Association of British Insurers said saw payouts of at least £174 million, but which was thought to have caused economic losses of closer to £300 million.
Now that PERILS AG has placed the Cumbria flood event under investigation it will assess whether it qualifies for full reporting. If it does, then the insurance and reinsurance market will receive updates as the losses are added up. We will update you should any further reports emerge.