The scheduled second estimate for insurance industry losses from European windstorms Mike & Niklas has released this morning at €895m by PERILS AG, an increase of 5% since the first loss estimate from back in May.
European windstorms Mike-Niklaus, two storms being reported on together due to the proximity of time in which they occurred and the resulting difficulty to separate losses from each of them, caused significant damage across Western and Central Europe, with the majority of the impact being felt in Germany.
PERILS’ initial estimate of the insured property market loss, which it published in May, for Mike-Niklas was €853m (approx $952m or £618m). At this level any impact to the reinsurance industry is expected to be light.
Today it has updated that figure, increasing it by 5%, to €895m (approx $992m or £631m).
The majority of the losses were incurred in Germany, where the impact of the storms was greatest with Niklas, which is also known as Lentestorm in the Netherlands, thought responsible for the bulk of the losses. Industry losses occurred across Austria, Belgium, Germany, the Netherlands, Switzerland and the United Kingdom.
PERILS’ market loss estimate is based on ultimate gross loss data, as reported by primary insurance companies, and excludes losses indemnified by government insurance schemes.
The insurance industry loss for Mike-Niklas remains unlikely to be a dramatic hit to the reinsurance industry. It won’t trouble any catastrophe bonds at this level, given their trigger point is typically set higher. There are also unlikely to be ILW’s with a trigger as low as EUR1 billion.
Losses from Mike-Niklas could eat into some aggregate reinsurance retention layers, but that’s likely the worst scenario from this level of industry loss.
The next estimate of insurance industry losses from Mike-Niklas will be published on 29th September 2015, in line with PERILS reporting schedule. The third and any following loss estimates will be provided in full resolution, i.e. by CRESTA zone and by the property sub-lines Residential, Commercial, Industrial and Agricultural.