Most U.K., Europe insurers well placed for losses from windstorm Christian

Non-life insurers in the United Kingdom and Western Europe are well-positioned to take on losses from last week’s major windstorm, rating agency A.M. Best said in a briefing released Monday.

The exception will likely be regional German companies, as that country had been hit hard prior to the Oct. 28 storm, mainly from hailstorms and flooding this past summer.

The storm, known as St. Jude in the U.K. and as Christian, Carmen or Simone in Europe, affected the U.K., France, Belgium, Luxembourg, Germany, the Netherlands, Sweden, Denmark, Finland and Latvia and Estonia in the Baltic region, resulting in at least 15 deaths, according to A.M. Best.

Early estimates place losses in the U.K. at as much as £500 million, according to the briefing, although analysis is ongoing. Losses will, however, be manageable for most insurers, the firm said.

“Rural areas south of London sustained some of the worst damage, although this is unlikely to result in insured losses of a magnitude that would be problematic for domestic insurers,” Stefan Holzberger, managing director of analytics with A.M. Best noted in a statement.

“Claims are likely to be mainly for residential property and motor, with few commercial losses. Furthermore, the storm system passed through southern England quickly, rather than dwelling over an area for a prolonged period, which tends to cause more extensive damage and higher losses. Consequently, A.M. Best expects claims to be of relatively low value, with limited total losses for residential property.”

Europe also saw few major natural catastrophe loss events in the first five months of the year, the firm noted, although heavy rain and flooding did notably occur in June in central Europe.

That had led to a less positive scenario for domestic insurers in Germany, A.M. Best said.

“For German insurers that write the majority of their business locally, with a concentration in property lines, these accumulated losses may cause companies to exceed their catastrophe budgets significantly,” Yvette Essen, director of industry research for Europe and the emerging markets and author of the briefing noted.

“Depending on their level of reinsurance protection, these companies may post large underwriting losses for the year and could experience erosion in equity capital.”