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AIR: Winter Storm Xynthia Could Hit Insurers for 3 Billion Euros

Posted on 03 Mar 2010

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Catastrophe risk modeling firm AIR Worldwide estimates that insured losses in France, Belgium, Germany, and Netherlands from winter storm Xynthia will be between Eu1.5 billion ($2 billion) and Eu3 billion ($4 billion).

The strong cyclone approached the Atlantic coast of Western Europe on February 27, in the northern provinces of Spain and Portugal. It then moved northeast over the Biscayan Sea into central France before losing intensity on its path through Germany and eventually dissipating over the Baltic Sea.

The storm killed at least 47 people in France and caused at least two deaths in Germany this weekend. Ocean waves of “unheard-of magnitude” prompted widespread flooding, French President Nicolas Sarkozy said yesterday.

Winter storms are the most severe risk related to natural disasters for insurers in Europe as the industry’s weather- related costs are rising worldwide. Allianz has said it estimates that between 2010 and 2019 average annual insured losses from weather-related disasters could grow to $41 billion from an average of $33 billion a year between 1999 and 2008.

Winter storm Kyrill, which battered countries including the U.K., the Netherlands and Germany in January 2007, caused $5.8 billion in insured losses in Europe, according to estimates by Munich Re. That makes it the second-most costly European storm after winter storm Lothar, which caused $5.9 billion in insured losses in 1999.