The loss potential of severe thunderstorms is increasing in many parts of Europe mainly due to the growing intensity of thunderstorms and the increasing vulnerability of expensive building façades to hail damage, according to Munich Re’s latest Topic Geo report.
Over the last few years, severe thunderstorms in Europe have caused a number of losses of more than a billion euros, mainly as a result of hail, strong gusts and flash floods. The costliest thunderstorm event since 1980 occurred in Germany in July 2013, when powerful hailstorms in particular caused overall losses of US$5 billion in today’s values. About US$3.8 billion of this was insured.
Prof Dr Peter Höppe, Head of Munich Re’s Geo Risks Research department said expensive construction materials and complex building façades are a major contributing factor to the increasing loss potential of hailstorms. Recent studies have also shown that the intensity of thunderstorms and hailstorms has increased in many regions.
“Rising moisture content in the lower atmosphere is a key driver of stronger thunderstorms – a physical consequence of the long-term warming of the world’s oceans. With values also continuing to rise, prevention is becoming even more important to keep loss levels low,” he added.
New method for analysing historical loss data presented
The reinsurer has also used a new method for a more detailed evaluation of historical loss data – taking into consideration the economic development of a region affected by a loss event in the period since the natural catastrophe occurred. In the case of regional analyses, it said this format allowed for more precision in the loss-mitigating effect of prevention measures and in changes on the hazard side such as natural climate cycles or climate change.
Unlike techniques based solely on inflation-adjusted figures, this new method does not reveal a rising trend in overall global losses since 1980. The reinsurer highlighted that the data extrapolated to today’s values are distorted by the economic development of China in recent decades.
“For example, flood losses in China from the 1990s would now have to be multiplied by a factor of 20 in some cases to arrive at today’s values. At the same time, prevention measures are not included in this calculation. Recent weather events in China have produced reduced losses thanks to flood-control measures taken there. These two effects tend to cancel each other out statistically.”
Munich Re added that if the loss statistics of individual regions or hazard types were examined using the new method, the following statements could be made – for example, that there has been a clear upward trend in losses adjusted to today’s values from severe thunderstorms in the USA since 1980, which tallies with meteorological observations. In contrast, there has been no upward development for flood losses in Europe following major events in the recent past thanks to flood-protection measures implemented there (in Germany above all since 2002).