Losses mount from cluster of winter storms

The UK and Germany are among those worst hit after a cluster of winter storms has affected Western and Central Europe, with Storm Dudley (Ylenia), Eunice (Zeynep) and Franklin (Antonia) hitting in quick succession. 

In the UK, severe flood warnings remain in areas close to the River Severn where flooding continues to pose a danger to life. 

Met Office chief meteorologist, Steve Willington, said: “A strong jet stream is driving weather systems across the North Atlantic Ocean with a succession of weather fronts moving into the UK bringing more wet and windy weather.”

Insurers are anticipating losses from the storms will be in the billions of euros range, with German actuarial firm Meyerthole Siems Kohlruss (MSK) anticipating claims from Eunice (Zeynep) alone will be over €900m. It anticipates losses from Dubley (Ylenia) will be in the region of €500m, with a further €200m caused by Franklin (Antonia).

PwC anticipates the Eunice will cost UK insurers up to £350m and Dudley up to £75m. Mohammad Khan, General Insurance Leader at PwC UK, said: “It was expected that Storm Eunice would be severe and we’ve seen the strongest gusts impacting coastal areas as well as travel disruption with airlines and train operators cancelling flights and entire rail lines impacting travel across the country.

“As with Storm Dudley, insurance losses will mainly be in respect of damage to homes, commercial properties and vehicles from falling trees and flying debris.” 

Extreme weather calls for resilience

The storms are a clear reminder of why businesses must focus on building resilience to extreme weather, according to Owen Lewis, vice president - group manager, Account Engineering at FM Global

“It is vital that businesses are proactive when it comes to risk management. If businesses don’t focus on developing resilient facilities, they could potentially experience serious disruption and an associated loss in revenue,” he said.

The impacts of flooding, for example, often go beyond the immediate devastation of a building and its contents. Research commissioned by FM Global shows share prices of damaged firms drop 5% in the year after major floods.

“Finding out which methods can effectively mitigate against this risk is therefore essential,” continues Lewis. “Preparation can include both long-term steps which a facility takes to mitigate flood exposure, as well as short-term actions in the run-up to a flood occurring which should form part of a flood emergency response plan (FERP).

“Businesses also need to understand that in some instances the changing climate is also having an effect on flood risk. Areas previously thought of as safe may find their flood profile changing.

UK launches Flood Insurance Directory

”Many studies indicate that increased rainfall may bring severe flooding to numerous regions, like the UK, in the near future. It is more important than ever before that businesses focus on becoming climate resilient. Businesses who ignore these risks do it at their own peril, as resilience has never before been such a valuable asset.”

Meanwhile, UK broking trade body Biba has launched a new Flood Insurance Directory, in association with the ABI, Flood Re and the government’s Department for Environment, Food and Rural Affairs (Defra).

The newly launched directory signposts and highlights “specialist firms that are well placed to help find insurance solutions for those in flood risk areas and seeks to provide solutions from either Flood Re or from other insurance markets”, explained Graeme Trudgill, executive director of Biba.