The latest Perils industry loss estimate for the damage caused by storms Babet and Aline in 2023 has reached £597m (€691m) with the majority of the losses in the UK.
Perils, an independent Zurich-based organisation providing industry-wide natural catastrophe exposure and event loss data, estimated losses in December of £439m (€509m) but that had risen in January to £590m (€683m).
Now, that figure has climbed again and could reach a new high when the final estimate is revealed in October. The loss estimates cover the property line of business and are based on loss data collected from the affected insurance markets.
The latest data comes as Luzi Hitz, product manager at Perils, has issued a warning over the increasing impact of climate change stating: ”The warming climate will drive a rise in the frequency of winter flood events. The British Isles witnessed a record number of named storm systems, many bringing extensive rainfall leading to flooding.”
The two storms, which are defined by Perils as low pressure systems, brought heavy rains and strong winds to the British Isles and northwestern Europe in October 2023.
Continuous intense rainfall resulting from a stationary weather pattern led to flooding in Ireland, Scotland and Wales along with the Midlands and Eastern regions of England. While flooding dominated the insurance industry impact in the UK and Ireland in Germany, Denmark, and Norway wind damage was the primary contributor to insurance losses.
Hitz added: “It has been six months since the Babet-Aline Floods and during that period, many parts of Europe, and particularly the UK and Ireland, have continued to experience persistent extreme wind and rainfall events.
“While the region [British Isles] has seen major winter floods in the past, such as the Desmond and Eva-Frank Floods in December 2015, given milder autumn and winter temperatures, there is a greater capacity for water storage in the atmosphere, which tends to precipitate as rain rather than snow.”
Mark Dutton, director at W Denis, said: “Conventional insurance is not always suitable to deal with climate issues as there has to be physical loss or damage caused by a specified peril, e.g. fire or flood. However, extreme weather conditions can cause non-damage interruption to businesses“. Non-conventional insurance is available from W Denis to guard against extreme conditions of weather, linked to pre-determined temperatures (hot or cold) or excessive rainfall or drought. “Such parametric insurance – a non-traditional insurance product that offers pre-specified pay-outs based upon a trigger event – should be on the agenda for risk managers to routinely review as part of their exposure management: ”he added.
W Denis are one of the largest independent insurance brokers in the UK and arrange competitive insurance solutions. To discuss this further with a broker at W Denis, please make arrangements with Daniel Moss at daniel.moss@wdenis.co.uk or on 0044 (0)113 2439812.
