Artemis: Billion plus storm losses expected from Dudley (Ylenia) & Eunice (Zeynep)

Artemis, vom 21. Februar 2022

Insurance and reinsurance markets are facing losses into the billions after the impacts of two severe European windstorms, Dudley (Ylenia) and Eunice (Zeynep), while the jet stream continues to drive low pressure systems across the Atlantic and towards the continent.

storm-wind-wavesDudley and Eunice are the UK names for the two recent and most high-profile European windstorms, while Ylenia and Zeynep are the names used across much of Europe for the same two low pressure systems.

Storm Dudley (windstorm Ylenia) impacted the UK and then crossed Western and Central Europe on February 16th and 17th, with hurricane-force wind gusts that exceeded 80 mph widely experienced.

Widespread wind-related property damage was reported across Europe from the United Kingdom to Poland, with Germany one of the countries badly affected.

In total, more than 1 million people lost power from this storm.

Impact Forecasting, the catastrophe risk modelling and meteorology unit of insurance and reinsurance broker Aon, said that total economic and insured losses from windstorm Dudley (Ylenia) were expected to minimally reach into the hundreds of millions of Euro.

PwC said last Thursday that Dudley (Ylenia) was expected to drive between UK £40 million and £75 million ($54.5m to $102 million) of insured losses in Britain.

“The losses will mainly be in respect of damage to homes, commercial offices and vehicles from falling trees and flying debris,” Mohammad Khan, PwC UK’s leader of general insurance explained of Dudley.

Actuarial consultancy Meyerthole Siems Kohlruss (MSK) commented on the impacts of storm Ylenia in Germany and gave an insurance industry loss estimate of EUR 500 million.

“We estimate the insured loss in Germany at EUR 500 million,” Onnen Siems, Managing Director of MSK explained.

“Due to the large-scale event, the amount of damage is distributed more evenly in the market and shouldn’t relate to reinsurance programs, Siems added, saying that “A loss of this size occurs every one to two years”

“Other countries such as Great Britain, Denmark and Poland are also affected, but most of the damage in Europe is likely to come from Germany.”

Storm Eunice (Zeynep):
A day later, Storm Eunice (windstorm Zeynep) impacted Ireland and the United Kingdom first, before crossing into other parts of Western and Central Europe.

Storm Eunice (Zeynep) was expected to be a stronger and more damaging European windstorm and before the storm even arrived forecast models were indicating that extensive damage could be possible.

The weather system that became storm Eunice (Zeynep) deepened rapidly and was termed a weather bomb in the media, while meteorologists warned of a potential sting jet that could drive intense wind gusts.

Storm Eunice (windstorm Zeynep) crossed the United Kingdom and other parts of Western and Central Europe on February 18th and 19th, with wind gusts exceeding 100 mph experienced.

The UK recorded a record wind gust of 122 mph off the Needles of the Isle of Wight, the strongest wind speed recorded ever in the United Kingdom.

PwC said that UK insured losses from Eunice (Zeynep) were expected to reach UK £200 million ($272 million) to £350 million ($476 million), with property damage, business interruption and travel disruption seen as the main drivers.

Khan said, “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.”

Germany actuarial consultancy Meyerthole Siems Kohlruss (MSK) commented on windstorm Zeynep’s impacts in Germany as well and expect the insurance industry bill will be higher than Ylenia, with insured losses likely to rise towards EUR 1 billion, according to the firm.

“For Germany, we are assuming insured losses of over EUR 900 million,” Onnen Siems explained.

“In Germany, Zeynep is the most intense storm since Kyrill 2007, which was the first storm in recent history to cover the entire country with high wind speeds and caused insured losses of more than 3 billion euros in today’s values,” Siems added. “Zeynep will not be that expensive, but it can come in the damage region of storm Friederike in 2018.”

Zeynep brought high wind speeds to Germany, including gusts of 162 km/h at a lighthouse on the coast. They were accompanied by storm surges on the North Sea, for example a “very severe storm surge” in Hamburg with 3.5m above the mean high water level.

Windstorm Friederike drove insured losses of close to EUR 1.2 billion in Germany when it struck in 2018.

“The damage caused by Zeynep can possibly come even closer to that of Friedrike, depending e.g. on the inflation rate and increases in construction prices,” Siems said.

Insurance and perhaps reinsurance market losses are expected to reach into the billions from these two storms, it appears, while the spell of stormy weather continues with storm Franklin striking the UK late Sunday and parts of Europe into Monday.

Flooding is also increasingly seen as a driver of loss, after repeat storm systems drop more heavy rain onto already soaked ground.

Another named storm system is also forecast as possible for the UK later this week, with storm Gladys expected around Thursday, although likely to be less severe, current forecasts suggest.

Loss aggregation company PERILS AG has placed storms Dudley (Ylenia) and Eunice (Zeynep) under investigation and is expected to report on the insured loss total, as these will clearly exceed its reporting threshold of EUR 200 million.

Moody’s analyst Dominic Simpson commented on the impacts of the storms in the UK, saying, “Storms Dudley, Eunice, and Franklin could cost UK insurers more than £400 million in claims, primarily impacting those providing property coverage to homeowners and businesses. Considering the impact on insurers of similar-sized storms in the past, we believe that whilst denting their weather loss budgets, UK insurers on the whole should be able to comfortably absorb these losses within their earnings during 2022.”