The insurance and reinsurance industry loss caused by extratropical cyclone, or European windstorm, Friederike (David), which struck northern Europe in January, has been pegged at EUR 1.465 billion (approximately US $1.8 billion) by PERILS AG.
Windstorm Friederike caused significant damage as it tracked across European countries including the British Isles, Belgium, the Netherlands and Germany on 17th and 18th January 2018.
PERILS, which has completed its initial assessment of Friederike’s impact on insurance and reinsurance interests, said that the extratropical cyclone windstorm was compact and fast-moving, generating particularly strong winds in the Netherlands and Germany, where a record gust of 203km/h was registered on the Brocken mountain in the state of Saxony-Anhalt.
Storm Friederike’s winds caused severe damage and disruption, bringing the Netherlands and the German states of North Rhine-Westphalia, Hesse, Saxony Anhalt, Thuringia and Saxony to a virtual standstill, PERILS explained. Friederike was responsible for the deaths of eight people in Germany, three in the Netherlands and one in Belgium.
The initial estimate of the insured property market loss for windstorm Friederike, based on loss data collected from affected insurers by PERILS, has been put at is EUR 1.465 billion.
The majority of the insurance industry loss from Friederike occurred in Germany and the Netherlands, PERILS notes.
Eduard Held, Head of Products at PERILS, said, “While the market loss from Windstorm Friederike of EUR 1’465m is significant, we estimate that there have been 12 European windstorm events in the past 40 years which would have exceeded this figure had they occurred today. These events include 87J, Daria, Herta, Vivian, Wiebke, Anatol, Lothar, Martin, Jeanett, Kyrill, Klaus and Xynthia.
“On this basis, we would estimate that the Europe-wide market loss level of Friederike would be reached or exceeded on average once every 3-4 years. For Germany and the Netherlands alone, however, the return period for the respective market loss levels would be higher.”
At almost EUR 1.5 billion Friederike is one of the largest European windstorm losses in recent years. In fact you have to go back to windstorm Klaus in 2009 to find a storm with a higher industry loss estimate.
Of course, the lack of major storm impacts in Europe is one reason that European property catastrophe reinsurance pricing has been so depressed in recent years. But Friederike’s EUR 1.5 billion industry impact is far too low to affect the state of the reinsurance market, or major global reinsurers appetites for risk in the region.