Simon Welton, Market Head P&C UK & Ireland at Swiss Re, says: “Thirty-one years on from the so-called Burns’ Day Storm, Cyclone Daria remains a powerful example of the risk attendant on rising temperatures and a relevant warning of the financial pressure looming large on the horizon of companies and markets at any one time.
“Devastating swathes of northwest Europe between the 25th and 26th of January 1990, Daria remains one of the strongest storms since records began – and also amongst the most expensive. We estimate the total cost of property damaged to be roughly EUR 6 billion, caused most notably by widespread flooding, loss of electricity and major deforestation. 95 lives were tragically lost, and all costs combined, UK insurers alone paid out almost GBP 3.37 billion.
“Not only did Daria drive both local companies and markets in general to the limits of their existing financial capabilities, it also exposed the limits and oversights of insurers’ own policies – particularly in terms of claims inflation, clustering, and unexpected aggregation from multiple events within the same contract period.
“And there are worrying parallels between the circumstances that led to this devastating event and those we’re experiencing today.
“Daria was preceded by an unusually warm winter, proving that the need to prepare for such occurrences is increasingly important in the present day. With temperatures rising around the globe and 2020 now confirmed as Europe’s hottest year on record, high-severity weather events like Cyclone Daria are not just possible, but increasingly likely.
“It is only a matter of time before another major winterstorm rewrites the record books, and insurers should act now to ensure that they and their clients have the resilience necessary to withstand the blow.”
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