PERILS releases initial loss estimate for European windstorm Andrea

PERILS AG, the independent Zurich-based company providing industry-wide European catastrophe insurance data and loss indices, has released an initial loss estimate for another of the European windstorms which affected the region this winter. Windstorm Andrea hit western Europe on the 4th and 5th of January 2012, impacting Germany, UK, France, Benelux and Switzerland.

PERILS puts their initial estimate of the property insurance market loss from Andrea at €267m. The majority of the losses came from within Germany, although all the other countries impacted contributed some amount of the overall loss. In line with their reporting schedule PERILS will update the loss estimate on the 4th April.

This loss won’t be sufficient to trouble any exposed European windstorm catastrophe bonds, although it could qualify under the terms of any aggregate deals. Even if it did qualify, with the European windstorm season more than half way through investors in these cat bonds must be feeling confident of another year without losses.

Edi Held, Head of Sales & Products at PERILS, said; “Andrea was the last of a series of windstorms which impacted Europe between the end of November 2011 and the beginning of 2012. While all of the six events that PERILS investigated during this period resulted in significant local damage, one has to bear in mind that the resulting market-wide property losses are still only small fractions of the potential industry loss resulting from a 1-in-250 year pan-European event, which could be in the tens of billions of Euros.”

That is a good point worth remembering as a major storm resulting in tens of billions of Euros of losses could trigger multiple cat bonds all at once, if for example it struck the UK, France or Germany.

Last month PERILS reported on the losses from European windstorm Joachim and are due to update that estimate on the 15th March.

PERILS also announced today that it will not report on windstorms Dagmar (also known as Patrick) and Ulli (also known as Emil) as the property market losses resulting from each of these events are expected to remain below PERILS’ loss reporting threshold of €200m per event in the eleven markets which it monitors. Dagmar affected the Nordic countries in late December 2011, while Ulli, which occurred in early January 2012, mainly affected the UK, with losses also occurring in Denmark and the northern regions of France, Belgium, the Netherlands and Germany.