Move insurers to assess the risk of wind Growing Across Euro

Nation's Leading Expert warns against purchasing the Move assuraInsurers growth to assess the risk of wind across Europe, Marc Jones
Natural disasters come in many shapes, sizes and shapes, but the storms in Europe, emerged as the most important nat cat risks the potential for the region.

This month saw the creation of risk, a company based in Zurich by a group of insurers, reinsurers and brokers that collect data on disasters and share with the broader market. The first potential danger of the new company will be in European research is wind.

"European wind are the most likely scenario because of their severity," said David Flandro, Senior Vice President of Business Intelligence with the global reinsurance broker Guy Carpenter. "A good example is wind Kyrill, which struck in 2007. It increased the combined ratio of most European reinsurers, as we have seen."

Erik Ruettener responsible for disaster research and modeling at PartnerRe, said storms have the potential to reach a very large area of Europe at their success. " He stressed the importance of obtaining as much data as possible exposure to potential hazards, such as past losses, current levels of insurance and so on.

Hard Lessons

Kyrill is a name that will trigger bad memories. The storm struck on 17 January 2007, and finally blew itself on Russia on 19 January, after hitting Ireland, United Kingdom, France, Germany, Belgium, Netherlands, Denmark, Poland and the Czech Republic, with winds at 132 miles per hour. Overall, the bill damages of $ 10 billion (8 billion), with insured damages totaling approximately $ 6.1 billion, according to Swiss Re sigma report on natural disasters and catastrophes man in 2007.

If losses from a wind is the main threat to companies for Europe, is it worst case scenario for what would be the nightmare of the wind industry?

According Flandro exists. "If we saw a storm that was big enough on the path that led over Dublin, Birmingham, London, Paris, Brussels, Dusseldorf, Hanover and Munich, which saw tens of billions of euros of damage" he says.

As Swiss Re has identified in the past, the amount of insured damage from storms has increased globally, with particularly high peaks of recent hurricanes that made land in the United States, such as Katrina, Rita and Wilma in 2005. However, there are some regional differences in the rising tide of insured losses.

Profile Europe

Flandro said that Europe is different from that of the United States, what it is to see a demographic change as the baby boomers opt to retire more and more near the coast, with states like Texas, Florida and Louisiana see a lot of attention. This raises the number of people owning coastal property insured which is also very vulnerable to hurricane activity.

But in Europe, that this change does not occur. Instead, there is another type of emerging risks. "The savings have been disadvantaged in the past have changed," said Flandro. "If a bad storm had hit Dublin 20 years ago, there would not have been a huge bill. This is not true. We are seeing areas such as Eastern Europe increasingly rapid even if the recession has caused a break. Guy Carpenter is to examine the possibility of insured losses in Eastern Europe are much higher in the future if they are affected by a bad storm. "

Ruettener that Partner Re is looking to other storm-related natural disasters such as floods, which may be a byproduct of very heavy rains of the storm. According Ruettener, flooding is a very complex model, because it relies on a wide range of factors including the topography of the area, how much rain (or not) before the deadline and its effect on the amount of water in river systems, and insurance coverage in the area, among other factors. This too will increase the amount of data surrounding the storm that the industry requires.

As southern France and northern Spain to continue tot damage this year, the wind Klaus (BestWire, Feb. 6, 2009), the emphasis on the winds may deepen.

It is for this reason that the risk was created to provide insurance industrywide aggregate exposure data and industry loss estimates by risk type and region.

Risk that the claims of greater transparency in industry losses could facilitate the establishment of what he described as "precise and robust for loss triggers disaster bond structures."

This means that the industry in Europe is moving on a transparent pricing mechanism for a threat that can only grow over time.

(By Marc Jones, London editor: marc.jones @ ambest.com)

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