Re/insurance losses from European windstorm cluster highest since 2007: Perils

Windstorm clustering poses a serious challenge for the insurance sector as it makes it difficult to precisely allocate insurance claims to a specific storm, loss aggregator  Perils has said, disclosing the first estimate of industry losses from the trio of storms which impacted the British Isles and continental Europe in February.

According to Perils, the European windstorm series in February 2022 resulted in “significant losses” based on claims data collected from affected insurance companies. The series consisted of three storms named Ylenia, Zeynep and Antonia by the Free University of Berlin, and Dudley, Eunice and Franklin by the UK Met Office.

The initial estimate of the insured property market loss for the storm series is approximately €3.3 million - representing the “largest European windstorm loss since Kyrill in January 2007”, the loss aggregator claimed.

In total, approximately 1.8 million individual insurance claims have been filed. A vast majority of those are for non-structural damage with moderate average claim sizes.

The majority of losses occurred in Germany, followed by the Benelux states, the UK and France. Losses in Austria were modest. The storm series also affected Denmark and Switzerland, where impacts were limited, and Poland and the Czech Republic, territories which are not covered by Perils.

The storms caused major disruption and extensive damage to insured properties, with the strongest impact from Zeynep (Eunice) and the weakest from Antonia (Franklin).

The cluster of windstorms was driven by a strong jet stream which acted as a conveyor belt for low-pressure systems from the North Atlantic across the British Isles and on into Europe.

This clustering phenomena is not uncommon for European extratropical cyclones but given that the three events occurred within a short space of time and impacted similar areas, it makes it difficult for insurers to distinguish the claims, Perils explained.

“Moreover, event definition clauses for reinsurance purposes are not homogenous in Europe and can include meteorological conditions plus loss aggregation periods ranging from 72 hours up to 168 hours,” it added.

It is due to these reasons the losses from the European windstorm series have been reported as a single insurance event.

Perils expects to update this estimate of the market losses in May, three months after the event end date.

“Based on an actuarial analysis of European windstorm activity over the last 43 years, a loss of this size might be reached or exceeded approximately once every nine years on average,” Perils warned.