Windstorm Babet and Aline industry loss estimate lowered 8% to €639m

The insurance industry loss from October 2023’s European windstorms Babet and Aline has been lowered by almost 8% to €639 million by catastrophe data aggregator PERILS AG, reversing the previous trend of increases.

Back in December 2023, PERILS had initially estimated that these windstorms had caused an insurance industry loss of around €509 million.

Then, in January 2024, PERILS raised the industry loss estimate considerably, adding 34% to take the total to €683 million.

Most recently, just over one percent was added in April, to take the total estimated insurance industry loss for European windstorms Babet and Aline to €691 million.

The loss estimate for European windstorms Babet and Aline has seen some of the most significant fluctuation in loss estimates of any event of the last winter storm season, perhaps reflecting its complexity and the challenge of wind vs water driven loss attribution.

Flooding and storms caused by the two windstorms Babet and Aline impacted the British Isles and northwestern Europe during the period of 18th to 22nd October 2023.

The two low pressure systems were named Babet by the UK Met Office (Viktor by the Free University of Berlin (FUB)) and Aline by the Spanish state meteorological agency (Wolfgang by the FUB).

The loss estimate includes loss data collected from affected insurance markets, including Ireland, the United Kingdom, Germany, Denmark and Norway.

While the overall loss estimate has fallen, the contribution to it from the UK has actually risen.

Now, an estimated GBP 495 million of the losses from the storms are said to have occurred in the UK and were mainly flood-related, according to PERILS.

Luzi Hitz, Product Manager at PERILS, commented: “The Babet-Aline floods and storms are a good example to illustrate the different approaches to flood insurance across Europe. In Norway, flood coverage is included by law in every property policy, while in the UK and Ireland, flood coverage in property policies is widely offered by the insurance industry on a voluntary basis. In Germany, flood insurance is optional with many insureds in exposed areas not taking up the option to save on premium costs. Finally, in Denmark, flood damage from rivers, lakes and seawater is covered by the Danish “Naturskaderadet” government scheme.

“The diversity of flood insurance solutions represents an opportunity for the insurance industry to learn from the different approaches to find the most effective flood insurance strategy for their respective markets. With an increasing number of European flood events causing severe losses to households and businesses, this is more important than ever.”