RMS Puts Kyrill Insured Losses at $3.9 to $6.5 Billion

Risk Management Solutions (RMS), has released its initial estimate for insured losses from Windstorm Kyrill, indicating that it expects them to be between €3 billion and €5 billion ($3.9 billion and $6.5 billion). RMS’ estimates are somewhat lower than fellow modeler and risk consultant AIR Worldwide, who had put the insured losses at between €4 billion and €8 billion ($5.18 billion and $10.37 billion) (See IJ web site Jan. 22).

RMS said “Windstorm Kyrill was the most damaging storm to affect Europe for several years, causing widespread, consistent damage across the U.K., through Belgium and the Netherlands, Germany, Austria, Poland and the Czech Republic.

“Kyrill developed in the mid-Atlantic on Wednesday, January 17, and swept across the U.K. while deepening off the coast of Northern Ireland early on Thursday morning. After losing strength while passing over the U.K., Kyrill re-intensified over Denmark, with severe consequences for Germany and countries further east.”

RMS also indicated that “Kyrill caused damage over a broader area and was more intense than Windstorm Jeannette in 2002, which was the last storm to affect these countries and caused a total insurance bill of over €1 billion [$1.3 billion]. In the U.K., Kyrill was the most damaging storm since Windstorm Daria in January 1990, but was much less intense. RMS estimates that a repeat of Daria in the U.K. today would cause approximately €6 billion in insured losses [$7.8 billion – £4 billion].”

“While the windspeeds caused by Windstorm Kyrill can not be ranked alongside the major 1999 Windstorms, Lothar, Anatol and Martin, and the losses are low compared to what would be caused today by a storm such as Daria, Kyrill by nature of its size is a reminder of the loss potential from storms that can impact multiple countries across Europe,” noted Dr. Barbara Page, lead model manager for European windstorm modeling. “Kyrill subjected the European building stock to widespread damaging winds, but not of the intensity experienced during the 1999 storms.”

According to RMS’ loss breakdown the UK and Germany suffered the most damage, mainly from “residential and motor losses. Significant power outages affecting hundreds of thousands of people will also contribute to down-times and losses from frozen goods. In addition, transport was severely disrupted with the high winds and power outages halting many rail networks and hampering flying conditions.”
RMS added that it “is collecting damage observations and will be working extensively with European insurers to build on our historically thorough research into the performance of the European building stock.

“RMS generated the estimate of losses by re-constructing the footprint of Windstorm Kyrill using observation data from the dense network of stations maintained by individual country meteorological agencies, and modeling property-related losses within the updated RMS(R) Europe Windstorm Model released in spring 2006. The update focused on all components of modeling, including embedding the latest numerical methodologies into modeling windstorms, together with a detailed understanding of regional variations in European building stock.”