Severe storm losses in France show need for effective models

RMS’ Steve Drews looks back at the recent severe convective storm outbreak in France…

Severe convective storms are a frequent peril on the European climate risk landscape and cause significant losses every year. Sometimes viewed as attritional, the risk is often managed using historical experience, despite incomplete observational reporting.

Nevertheless, recent events have shown the potential cost this peril can cause for the (re)insurance industry. The broad spectrum of sources of severe storm loss includes localised tornadoes, damaging straight-line winds, destructive hailstorms and large derechos.

2022 has produced a significant number of these types of events. France alone has been bombarded by three separate periods of severe thunderstorms this year. The storms, running from 21-23 May, then 2-5 June and finally 18 June to 4 July, combined to deliver baseball-sized hail, damaging winds, flooding from torrential rains, tornadoes and lightning strikes. The storms in May struck across portions of western coastal France into northern France and the Paris Basin, with the early June storms extending through the remainder of France and then slamming the country again from mid-June into early July.

The magnitude of these losses is quite notable. France Assureurs, the French federation of insurance, announced that these three periods combined generated nearly 975,000 claims for insurers totalling €3.9bn ($3.99bn). Around 87 percent of total losses were for homes and automobiles, with the remaining 13 percent related to commercial losses, crops and agriculture. As a result insurers have been racing to fulfil the unprecedented number of claims filed by insureds.

“Losses of this size from the severe convective storm peril cannot be considered as just attritional. They show the need for explicit modelling of tornadoes, large hail and damaging straight-line winds across Europe in order to get a true representation of the true risk”

Derechos are becoming a more common household meteorological term due to notable recent events. A derecho across southern Europe on 18 August tracked over 620 miles (1,000 kilometres) from southern France to southern Poland.

A derecho, taken from the Spanish word for “straight”, is a cluster of thunderstorms producing destructive wind gusts for hundreds of miles. As defined by the US National Oceanic and Atmospheric Administration, a derecho has the capability of producing damaging wind swaths over 400 miles (650 kilometres) long and 60 miles (about 100 kilometres) wide, with wind gusts of 75 miles per hour or greater along its path.

At the time of writing, losses are being assessed but wind damage was reported in several countries, while hail damage was reported in Italy. More than 45,000 homes experienced power outages on the island of Corsica, France. There have been widespread reports of uprooted trees and downed powerlines and at least 13 fatalities.

Losses of this size from the severe convective storm peril cannot be considered as just attritional. They show the need for explicit modelling of tornadoes, large hail and damaging straight-line winds across Europe in order to get a true representation of the true risk. Utilising the latest science and claims history, the RMS Europe Severe Convective Storm HD model informs the industry through a 50,000-year probabilistic event set spanning 17 countries. Losses reaching nearly €4bn for one country in less than three months underlines the need for effective modelling.

Steve Drews is senior product manager at RMS