Wind Vulnerability in Europe – an Insurance Risk Modelling Perspective”

Dr. Navin Peiris of Risk Management Solutions

Extra-tropical cyclones that occur between Autumn and Spring in northern Europe results in billions of dollars of economic as well as insured loss annually across Europe. The wind footprint of these storms are characterized by low level peak gusts over wide swathes of a region with varying spatial intensification subject to local site conditions as well as meteorological variations. Given the high insurance penetration levels, the insurance and re-insurance industry utilizes catastrophe models to develop risk metrics for insurance premium pricing and risk transfer mechanisms through re-insurance and via capital markets. One of the key components of catastrophe models is the vulnerability of the insured risks, i.e. the building stock. This presentation will introduce the concept of catastrophe modelling, insurance and reinsurance and the impact vulnerability makes on insurance premium and reinsurance metrics. It will then discuss the drivers of wind vulnerability from physical and economic perspective and challenges in the characterization of wind vulnerability across Europe citing historical events such as 87J, Lothar, Anatol and recent events such as Klaus, Christian (St Jude) and Tini. The presentation will also briefly discuss the findings from Typhoon Haiyan field survey conducted by RMS, and the challenges faced in modelling wind vulnerability in Asia-Pacific.