UPDATE: AIR Puts Insured French Storm Losses at $465 to $930 Million

January 28, 2009

Catastrophe risk modeling firm AIR Worldwide has given its preliminary estimates of insured losses in France from winter storm Klaus of between €350 million and €700 million ($465 to $930 million).

AIR noted that the “strong extratropical cyclone (ETC) made landfall early Saturday morning in southwestern France and traveled east through southern France before exiting south to the Mediterranean coast less than twelve hours later. Klaus brought locally fierce winds in excess of 150 km/h [90 mph] (similar to a strong Category 1 hurricane) and torrential rains, causing building damage, flooding, as well as power outages and travel disruptions across southwestern France and parts of northern Spain.”

Dr. Peter Dailey AIR’s director of atmospheric science, described Klaus as a “mid-latitude storm that formed on Thursday night in the subtropical North Atlantic, west of the Azores Islands. The system moved northeastward into the Bay of Biscay on Friday. Exhibiting a period of very rapid strengthening known as ‘explosive cyclogenesis,’ Klaus’ central pressure dropped from about 1000 millibars late Thursday to a minimum pressure of 967 millibars on early Saturday morning. The storm quickly traveled over southern France at a speed of about 110 km/h [66 mph].”

AIR also noted that “Klaus was the most intense and damaging ETC to affect the region since Martin in December of 1999, which caused an estimated €2.5 billion [$3.32 billion at today’s exchange rate – less in 1999] of insured loss in France at the time.

Dailey added: “While the maximum wind speeds from Klaus were in some cases higher than for Martin, Klaus’ footprint of damaging winds within France was restricted the far south, while Martin produced wind damage over a larger portion of France. Also, because Klaus’ track was farther south than that of Martin, a greater portion of its most damaging winds occurred over water, sparing much of southeastern France from its strongest winds.”

According to AIR’s meteorological team, “Klaus’ southern route was fairly unusual. Historically, only about 6 percent of ETCs have moved south of Martin’s track, and amongst those storms, only 12 percent continued to move south of the Swiss Alps after exiting France.”

Dailey noted that “most ETCs move to the north and east as they traverse Europe. The route that Klaus took over France’s border with Spain is expected to occur only about once every 10 years. The ‘jet stream’—a corridor of strong upper-level winds that guide the path of mid-latitude storms—was situated unusually far south before and during the passage of Klaus.”

AIR has deployed two post-disaster survey teams, which have already begun to gather damage information in the affected regions in southern France. One team is surveying Bordeaux and the surrounding areas to the south and east. A second team is surveying Toulouse and areas to the east. Initial observations indicate damage levels as expected for this type of event.

The bulletin also noted that roughly half of the residential stock in France was built prior to 1970, primarily of “unreinforced masonry construction. At the wind speeds recorded for winter storm Klaus, AIR engineers generally expect wind damage to be restricted to the envelope (outer shell) of the building, including the façade, the roof, chimneys, and windows.”

“Most homes in the area are Mediterranean-style buildings with low-pitch terracotta roofs,” Dailey explained. “Damage in southeastern France is generally light and mainly restricted to roofs. Little to no damage has been observed to greenhouses and gas stations in the areas surveyed so far, indicating that high wind speeds did not occur in these areas. A great deal of tree damage has been observed, but property damage from downed trees is not common. Minor damage in Perpignan is fairly widespread where some of Klaus’ highest winds were observed.”

AIR also noted that the French authorities declared a state of alert on Monday “in eight departments in the south because of the risk of severe flooding. Flood damage is typically not covered in home insurance contracts, but government-backed compensation funds are available if the event is declared a natural catastrophe. Officials in the region have called for support from the EU Solidarity Fund to provide emergency aid. The French Federation of Insurance Companies, Fédération Française des Sociétés d’Assurances, has agreed to expedite the claims process and to extend the claims deadline.

“Klaus caused significant damage to electrical and telecommunications lines, and hundreds of thousands of homes remain without service in France. Very large claims from utility companies are possible. Business interruption losses may be considerable depending on how long it takes for power to be restored.

“France’s lumber industry was particularly hard hit by Klaus. French forestry groups reported that Klaus felled 60 percent to 70 percent of pine trees in parts of the southwest. The forests in this area, mostly privately owned, account for about a third of the country’s lumber production, but only a small percentage is insured against storm damage.”

Source: AIR Worldwide – www.air-worldwide.com

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