The initial estimate of the insured property market loss for flood damage caused by storm Desmond during Dec. 4-24, 2015 is £717 million ($1 billion), while windstorm losses from the event are estimated at £42 million ($59.3 million), according to PERILS, the independent Zurich-based organization that provides industry catastrophe insurance data.
The storm brought record-breaking rainfall to the U.K., which led to severe flooding that mainly affected the counties of Cumbria and Lancashire in northwest England, with flood waters peaking on Dec. 5-6. In addition to the U.K., Ireland and Scandinavia were also affected by wind and rain from storm Desmond on Dec. 4-6.
“Given the record-breaking amount of rain which fell over northwest England from Dec. 4 to 6, and the fact that it fell on water-saturated soil following an exceptionally wet November, it is no surprise that extensive flooding occurred from overflowing rivers and surface water run-off,” said Luzi Hitz, CEO of PERILS.
“After 2005 and 2009, this is the third time that the northwest of England has been affected by severe floods. This clearly underpins the need for the reliable U.K. flood insurance data which PERILS strives to provide, helping to further improve the industry’s understanding of UK flood risk and ultimately making it easier to insure,” Hitz continued.
Eduard Held, head of Products at PERILS, added: “After careful investigation and numerous discussions with data-providing insurance companies and other key market players, we concluded that for our initial estimate we would view the flooding from Desmond as an event on its own. In subsequent loss reports, and in line with our approach of applying the prevailing event definition used by the re/insurance markets, we may need to combine the flood losses from storm Desmond with flood losses from later events.”
PERILS Loss Reporting Schedule
In line with the PERILS loss reporting schedule, a second flood loss report for storm Desmond will be made available on March 4, 2016, and will be followed by a third loss report on June 4, 2016, which will contain loss data by CRESTA zone, and by the property sub-lines residential and commercial, PERILS said. Desmond’s losses from the peril of windstorm do not qualify for further reporting by PERILS because it falls below the organization’s designated reporting threshold of 200 million euros ($213.2 million) .
It is possible that for these subsequent loss reports, PERILS may need to re-evaluate the loss aggregation period to take into account the flooding which resulted from storms “Eva” and “Frank” later in December, PERILS explained. It will consider such factors as objective scientific data, information received from the data-providing insurance companies, and the prevailing event definition used by re/insurance buyers and sellers.
Was this article valuable?
Here are more articles you may enjoy.