Impact of Storm Eowyn: Insured Losses Estimated at €995 Million

Storm Eowyn has caused estimated insured losses of €995 million across Europe, particularly impacting Ireland and the UK. The storm brought fierce winds and led to various warnings but was less damaging than previous storms. The event highlights ongoing risks in the reinsurance market as it grapples with losses from other disasters, emphasizing the need for robust risk assessment models.

Storm Eowyn, known as Storm Gilles in Germany, has inflicted considerable damage across Europe, with insured losses estimated to reach €995 million. This storm, which impacted Ireland and the UK from January 24, brought winds exceeding 70 mph, and even up to 114 mph at Mace Head, marking one of the most intense wind events in Ireland’s recent history. Despite its severity, forecasts indicate that it is not as damaging as previous storms like Dudley-Eunice-Franklin and Kyrill.

The UK Met Office and Met Éireann issued several wind warnings across affected areas, including red and amber alerts for high-risk regions. Although initial wind gusts in populated areas of Ireland were somewhat milder than anticipated, Storm Eowyn is still classified as the most severe to strike Ireland since 2014. For both Ireland and the UK, loss estimates indicate a return period for wind-insured losses of 1-in-7 years and less than 1-in-5 years, respectively.

Using sophisticated modeling from Guy Carpenter and PERILS, loss estimates have been calculated by examining the storm’s activity between January 23 and January 25. PERILS Wind-Jeannie provided interim loss updates while damage projections were generated based on established curves per industry and occupation. Estimates for Europe ranged from €362 million to €995 million, with the UK expecting losses between £116 million and £451 million and Ireland predicting losses from €198 million to €451 million.

Guy Carpenter also highlighted that while the storm may not have caused extensive flooding, any water-related claims will contribute to total losses. The final performance of Storm Eowyn on the reinsurance market will depend on whether primary insurers exceed retention levels amid ongoing claims from other catastrophic events. Given the significant losses in 2024, reinsurance assessments are being revisited as insurers brace for continued catastrophic claims.

As the reinsurance market adapts to these challenges, there remains a notable stability in the cyber reinsurance sector due to improved underwriting practices and rising ransomware concerns. Furthermore, new capital influxes into the market have allowed for competitive pricing, improving options for clients. Looking forward, while Storm Eowyn serves as a reminder of windstorm risks, it also shows the importance of accurately assessing these perils and adapting strategies accordingly.

Storm Eowyn represents a significant weather event that tested the preparedness of the insurance and reinsurance industries across Europe, particularly impacting Ireland and the UK. The article highlights the scale of insured losses, the immediate consequences of wind damage, and ongoing assessments as they pertain to climate patterns and the frequency of such storms. It references established risk models that aid insurers in determining potential loss based on historical data and current trends in natural disasters.

In conclusion, Storm Eowyn serves as a significant reminder of the ongoing risks posed by windstorms in Europe, with insured losses expected to reach €995 million. Despite its intensity, it may not surpass recent storms in damage, though it underscores the need for resilient risk management strategies in the insurance industry. The evolving patterns of severe weather necessitate that insurers refine their catastrophe models to navigate future challenges effectively.

Original Source: www.insurancebusinessmag.com