Reinsurance News

Actuaries forecast €2.5bn+ loss following European storms

2nd July 2021 - Author: Matt Sheehan

Actuaries from Meyerthole Siems Kohlruss (MSK) are forecasting that insurance industry losses from the severe weather that impacted parts of Europe over the last ten days could exceed €2.5 billion.

The estimate follows analysis from Aon’s Impact Forecasting unit, which put the cost of the storms in the region of hundreds of millions of euros.

Weather conditions included thunderstorms, hail and even a tornado that hit the Czech Republic on July 24th.

France, Belgium, the Netherlands, Switzerland and Germany were among the other countries to experience widespread damage from the storms.

MSK told Reinsurance News that low-pressure storms Volker and Wolfgang which struck between 21st and 25th of June could drive €2 billion of losses alone.

Artemis ILS NYC 2023 conference

“The insured losses in this period amount to more than 2 billion euros in the affected countries Germany, Austria and Switzerland,” actuaries explained. “More than half of the damage occurred in Germany, mainly in the auto comprehensive insurance division.”

And another low-pressure storm called Xero could drive another €500 million of insured losses, after causing major hail damage in Switzerland and intense heavy rain in Germany.

Added to this is losses from the Czech tornado, which affected over 1,000 homes as it tracked across the south east of the country with winds of up to 140 mph.

Early estimates have put insured costs from the tornado at around US $150 million to $200 million, which leaves MSK confident that overall losses from the ten days of European storms will push the €2.5 billion mark.

However, actuaries did warn that it is “difficult to systematically summarize the damage, especially since different hourly clauses for storm / hail events and elementary / heavy rain are possible in reinsurance contracts.”

It is worth repeating that MSK’s insured loss estimate comes in much higher than Aon’s prediction of losses in the hundreds of millions of euros.

However, the broker did acknowledge that the June 17th to 25th outbreak “poised to become the sixth costliest severe convective storm outbreak in Europe,” and put total economic costs from the last fortnight of severe weather in Europe at more than $3.2 billion.

Print Friendly, PDF & Email

Recent Reinsurance News