Windstorm Ciarán insured loss seen up to €1.5bn Moody’s RMS

Risk modelling company Moody’s RMS has issued an estimate for insurance market losses from recent European windstorm Ciarán, saying it expects the industry loss will fall between €900 million and €1.5 billion (approx. US $1bn – $1.6bn).

The Moody’s RMS estimate compares to the only other official one to have emerged so far, which was Verisk’s extreme event solutions team, that estimated the windstorm Ciarán insurance industry loss at between €800 million and €1.3 billion.

As ever, there are differences in methodology, models and what’s included in the figures above, making comparisons challenging.

In agreement with Verisk, Moody’s RMS said that France accounts for the majority of the loss from storm Ciarán, while it also affected Belgium, the United Kingdom, the Channel Islands, the Netherlands, and Germany between November 1st and 2nd, 2023.

Moody’s RMS said that its estimate is based on wind hazard reconstructions using its European windstorm model and includes insured damage to property, automobiles, agriculture, and direct business interruption, but excludes infrastructure losses, which are not expected to be material.

The loss estimates also consider minor impacts from non-modeled sources of loss such as coastal and inland flooding, and damage to forestry, ports, and watercraft, Moody’s RMS said.

Positively, Moody’s RMS also noted that post-event loss amplification due to material and labor shortages is expected to be minor, even though inflationary trends remain in focus in the countries worst affected by the storm.

The risk modeller also noted that any losses from another recent European storm Domingos, that impacted Central-West France in the days after Ciarán, are not included in its estimate for insurance market losses.

Giovanni Leoncini, Senior Product Manager for Europe Windstorm Models at Moody’s RMS, commented, “Windstorm Ciaràn can be thought of as a weaker sibling of 87J, the Great Storm of 1987, which severely affected the United Kingdom and Northwest France in October 1987.

“Even with lower gust speeds and a more limited extent compared to 87J, losses will still be significant for France. Despite the recent period of windstorm activity, the destruction now brought by Ciaràn reminds us of the importance of extratropical cyclones for the (re)insurance industry.”