Wind related impacts and severe flooding and landslides from recent windstorm Alex that struck France and Italy are expected to drive billions in economic costs and hundreds of millions of losses to the insurance industry, according to Aon.
The insurance and reinsurance broker’s Impact Forecasting unit highlighted storm Alex in its latest weekly catastrophe report, saying that the event is expected to drive somewhere north of US $3 billion of economic costs to the wide region affected.
Given the extent of the damage seen, storm Alex could become the costliest catastrophe event to strike Europe in 2020 so far, the report explains.
Storm Alex blew in from the Atlantic to impact France’s western coastline with wind gusts reaching as high as 116 mph.
The storm also caused notable rainfall across Brittany and parts of France as its impacts travelled south.
But the most costly impacts were seen in the Mediterranean region of France and Italy, where extreme precipitation was recorded, with record levels of rainfall experienced and one total counted at 19.7 inches in 24 hours.
“This amount of precipitation was described to occur only once in 100 years or even more,” Aon’s Impact Forecasting team noted.
Damages in the Alpes Maritime region of southern France and the Nice area were estimated at around US $1.75 billion, on an economic basis. Although this is expected to rise.
A further US $1.2 billion of economic damages were preliminarily estimated for Italy, with further agricultural damages also suffered.
As a result, it seems highly likely the economic impacts of storm Alex will rise well above US $3 billion, once the damage is assessed and calculated.
“Considering these estimates, the event might even surpass Windstorm Ciara (Sabine) as the costliest event in Europe of 2020 to date. It will likely result in notable payouts for local insurers – however, it is important to note that much of the flood damage is expected to be uninsured, as a large part of the losses in France were attributed to damage on infrastructure; and also due to very low insurance take-up in Italy,” Aon’s Impact Forecasting said.
The flooding related impacts in southern regions of France and Italy are expected to be the main source of loss for the insurance and perhaps reinsurance industry.
Insurance payouts are expected to reach into the hundreds of millions EUR, Aon’s Impact Forecasting team explained.