Swiss Re Insurance-Linked Fund Management

PCS - Emerging Risks, New Opportunities

Windstorm Xynthia hammers France; no initial impact to catastrophe bonds expected


Windstorm Xynthia tracked across northern France and into Germany on Saturday 27th and Sunday 28th February. Wind speeds recorded reached as much as 30 meters per second and a tidal surge (which coincided with spring tides) impacted the French Atlantic coast causing major damage and flooding. 50 people have been confirmed killed due to the storm and thousands are homeless along the French Atlantic coast which was the worst impacted area.

Estimates of insured losses were initially high, with some reports stating that windstorm Xynthia would cause as much (if not more) insured losses as last year’s European windstorm Klaus. Now some of those estimates are being lowered by experts and risk modelling firms as more accurate data and wind-speed analysis becomes available.

Over €1.25B of catastrophe bonds have exposure to European windstorms which at first made investors nervous. Now with the lowered estimates (estimates that will be firmed up and made more public in the coming days) investors have breathed a sigh of relief.

However, while it’s highly unlikely that the losses resulting from windstorm Xynthia could directly trigger any European windstorm catastrophe bonds the storm could contribute to losses suffered by cat bonds which aggregate losses from a number of different regions. That won’t be known until later in the life of those cat bonds this year.

Once again, a European windstorm has demonstrated that Europe is just as at risk of major losses from winds as the U.S. and hurricane prone areas. This gives a timely reminder to investors that no catastrophe linked investment is 100% safe and to cedents that perhaps hedging your windstorm risks in Europe with the capital markets is a very good idea.

Artemis Live - ILS and reinsurance video interviews and podcastView all of our Artemis Live video interviews and subscribe to our podcast.

All of our Artemis Live insurance-linked securities (ILS), catastrophe bonds and reinsurance video content and video interviews can be accessed online.

Our Artemis Live podcast can be subscribed to using the typical podcast services providers, including Apple, Google, Spotify and more.

Print Friendly, PDF & Email

Artemis Newsletters and Email Alerts

Receive a regular weekly email newsletter update containing all the top news stories, deals and event information

  • This field is for validation purposes and should be left unchanged.

Receive alert notifications by email for every article from Artemis as it gets published.