Germany, Austria and Switzerland (the DACH region) experienced a series of adverse weather events in June, resulting in losses (mainly in property and agricultural business) in excess of €2bn, according to Cologne-based actuarial consultancy Meyerthole Siems Kohlruss (MSK).
Low-pressure systems Volker and Wolfgang caused a number of destructive storms on 21-25 June, with more than half the losses incurred in Germany and especially in the motor business, stated MSK.
This was followed by another low-pressure spell, Xero, on 28 June to 1 July, which brought major hailstorms to Switzerland and heavy rain throughout the DACH region, although it wasn’t as destructive as the first period.
MSK managing director Onnen Siems commented: “Insured losses during the period in question exceed €2bn in Germany, Austria and Switzerland.”
Although definitely one of the larger weather-induced loss periods on record for the DACH region, there have been episodes of similar magnitude in the past. One example being the Munich hailstorm of 12 July 1984, known as the ‘Münchener Hagelereignis’.
One, for want of a better word, positive aspect of last month’s storms was that they largely bypassed the region’s major cities. On the other hand, the two relatively protracted periods make it challenging to define just how many loss events occurred.
As Mr Siems noted: “It is difficult to systematically summarise the damage, especially since different hourly clauses for storm/hail events and elementary/heavy rain are possible in reinsurance contracts.”
Another noteworthy feature is the temperatures recorded during the month. It was the third-warmest June in Germany since records began in 1881, and 2.6°C warmer than the average during the past 30 years.
Is global warming making its presence felt? Mr Siems did acknowledge that possibility, saying “a connection between insured losses and climate change is becoming apparent”.
If that is the case, maybe June was more a case of what will soon be the new normal, as opposed to extreme weather, with the resulting implications for risk management, pricing and the like.
Insurers will monitor the situation and recalibrate their risk models accordingly. June’s events, although significant, were not unprecedented and are unlikely to burden the sector unduly – on the scale of the winter storms in 1999, for example.
As Mr Siems put it: “The extent of the losses is indeed unusual, but there won’t be any financial problems for insurers.”