2013-11-04 09:04:02 -
Non-life insurers in the United Kingdom and Western Europe remain on course to post strong overall performances in 2013, despite the windstorm of October 28. However, smaller, regionally focused German companies may incur underwriting losses for the year from an accumulation of natural catastrophes, according to a new report by A.M.
For A.M. Best-rated companies, losses from the windstorm—known as St Jude in the United Kingdom and Christian, Carmen or Simone in Europe—are expected to be well within most insurers’ catastrophe budgets. The windstorm hit countries including the United Kingdom, France, Belgium, Luxembourg, Germany, the Netherlands, Sweden, Denmark, Finland and the Baltic States of Latvia and Estonia, resulting in at least 15 deaths.
In a new Best’s Briefing titled,
“European Insurers Well Placed to Sustain Windstorm Losses”, A.M. Best expects claims will be manageable for UK insurers. Stefan Holzberger, managing director, analytics, 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. 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”.
The report notes the first five months of 2013 were largely benign for European natural catastrophes and large losses, although in June, heavy rain and subsequent flooding occurred throughout the Czech Republic, Germany, Austria, Poland, Hungary, Slovakia and Switzerland, resulting in an estimated EUR 18 billion of economic damage and EUR 4 billion in insured losses. A.M. Best is continuing to hold discussions with rated entities to determine their exposure in Continental Europe. Based on the information received to date, the windstorm is not expected to result in changes to ratings or outlooks. For rated entities with catastrophe exposures, based on experience in the current year, aggregated catastrophe losses for this storm and other weather-related events remain well below 2013 budgets.
However, while A.M Best expects companies with diverse books of business in the United Kingdom, Continental Europe and the United States to remain well positioned to report a good year for underwriting earnings, this scenario may not apply to domestic German insurers. In addition to the recent windstorm and June’s flooding, hailstorms hit Western and Southern Germany in July and August, resulting in estimated losses of EUR 2.7 billion. Yvette Essen, director, industry research - Europe and emerging markets, and author of the briefing, added: “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. Depending on their level of reinsurance protection, these companies may post large underwriting losses for the year and could experience erosion in equity capital.”
To access a complimentary copy of this briefing, please visit www.ambest.com/press/110403europeanstormsbriefing.pdf : cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww ..
A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com : cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww ..
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A.M. BestStefan Holzberger, +(44) 20 7397 0288Managing
Director, Analytics email@example.com
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Morrow, +(1) 908 439 2200, ext. 5378Senior Manager, Public
: mailto:email@example.com orYvette
Essen, +(44) 20 7397 0322Director, Industry ResearchEurope
& Emerging Markets firstname.lastname@example.org
: mailto:email@example.com orJim
Peavy, +(1) 908 439 2200, ext. 5644Assistant Vice
President, Public Relations firstname.lastname@example.org