RMS pegs storm Ciara – Sabine industry loss at up to EUR 1.8bn

Catastrophe risk modelling firm RMS has come out with its first estimate for insurance and reinsurance industry losses from recent European windstorm Ciara – Sabine, pegging the total at up to EUR 1.8 billion.

Interestingly, RMS’ estimated range for industry losses from the storm that struck northern Europe last weekend is for the eventual bill to fall between EUR 1.1 billion to as much as EUR 1.8 billion (almost US $2bn), which is closely aligned with fellow modeller AIR Worldwide.

Earlier today, AIR Worldwide was quick off the mark with an estimate that storm Ciara, or storm Sabine as it was named in Germany, would result in an insurance or reinsurance industry loss of between EUR 1.1 billion and EUR 1.9 billion, the top-end of which is almost US $2.1 billion.

It’s extremely rare industry loss estimates from these two leading catastrophe risk modelling firms are so closely aligned.

As we reported earlier this week, actuaries from Meyerthole Siems Kohlruss (MSK) told us that they expect the eventual property insurance market loss from windstorm Sabine’s impacts in Germany will cause an insured loss of around EUR 600 million.

RMS said today that it expects Germany will account for around half of the insurance and reinsurance market losses in its estimate.

While impacts were also seen in France, the United Kingdom, the Netherlands, Belgium, Switzerland, Austria, and the Czech Republic between February 8th and 11th.

RMS said that it based its industry loss estimate on a hazard reconstruction undertaken with its V 15.0 RMS Europe Windstorm Model.

It includes damage to property, auto, forestry, agriculture, and direct business interruption but excludes losses from damage to infrastructure.

As with AIR Worldwide’s loss estimate, this does not seem to include any loss impacts from flooding, hence the insurance and reinsurance market can certainly add some hundred million Euros or more to these estimates, as flooding in the UK in particular was seen to be damaging across some regions.

RMS noted that it does not expect any post-event loss amplification and expects that business interruption losses will be low, while losses from auto lines are not expected to exceed more than 5% of the total.

“Windstorm Ciara is very likely to be the first billion-Euro windstorm of this season. This event exhibited characteristics typical of European windstorms, with low gusty winds causing widespread damage across several countries, and is most comparable to Windstorm Emma in 2008,” explained Michèle Lai, product manager for Europe Climate Models at RMS. “Our loss range represents the current uncertainty in the event loss, which is primarily driven by prolonged, squally gusts that locally affected several regions across the continent.”