February storm claims to reach €3.3 billion - PERILS

PERILS has disclosed its initial loss estimate for the European windstorm series which affected the British Isles and continental Europe from 16 to 21 February 2022.

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.

Based on claims data collected from affected insurance companies, PERILS’ initial estimate of the insured property market loss for the storm series is €3.3 billion, which represents the largest European windstorm loss since Kyrill in January 2007.

The majority of losses occurred in Germany, followed by the Benelux states, the United Kingdom 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 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 poses a challenge for the insurance sector as it makes it difficult to precisely allocate insurance claims to a specific storm given that the three events occurred within a short space of time and impacted similar areas.

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.

Given these factors, PERILS has reported the losses from the European windstorm series as a single insurance event.

The storm series generated strong winds across the British Isles and Western Europe causing major disruption and extensive damage to insured properties with the strongest impact from Zeynep (Eunice) and the weakest from Antonia (Franklin).

In total, approximately 1.8 million individual insurance claims were filed. While the vast majority were for non-structural damage with moderate average claim sizes, the huge number of claims resulted in an industry loss of €3.3 billion.

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.