In recent weeks, the UK and Ireland have been buffeted by storms, with Windstorm Éowyn recorded as the fifth named storm of the season by the UK Met Office. With the storm bringing strong winds and disruption, the loss adjusting giant Crawford reported an 800% increase in claims notification due to its devastation.
Meanwhile, research from Guy Carpenter revealed that during the period of Jan. 22-23, Wind-Jeannie’s estimated loss forecasts for Europe ranged from approximately €362 million to €995 million. For the UK, estimated losses were between £116 million and £451 million, while losses in Ireland ranged from €198 million to €451 million.
Speaking with Insurance Business, Jason Richards (pictured), country president and CEO UK & Ireland at Swiss Re, touched on the scale of the damage seen to date – and the weighty reminder it brings of the need to strengthen resilience against extreme weather in the UK. He noted that Storm Éowyn has been classified by meteorologists as a 'once in a generation' event due to its record-breaking mean wind speeds of 135km/h (exceeding the 131 km/h record set in 1945) and wind gust observations of 183km/h (exceeding the record set in 1961 during Hurricane Debbie).
“More than a million homes were left without power, and, as of [Feb 01], thousands of properties in Northern Ireland were still yet to have this restored,” he said. “High winds led to widespread property damage and travel disruption, with two people tragically losing their lives.”
Richards highlighted how Storm Éowyn – and other recent storms such as Darragh – highlight the ever-increasing risk the UK is facing from extreme weather. “The UK is vulnerable to windstorms and floods, and we are seeing an increase in the intensity and frequency of heatwaves during the summer and the volatility of existing weather patterns in winter.
“Against this backdrop, it is increasingly vital to steer development away from high-risk areas and invest in protective measures to keep assets insurable.”
Examining some of the key ways in which home and business owners can strengthen their resilience, Richards emphasised that, ultimately, there needs to be a move to “adjust our behaviour and build improved infrastructure to better cope with changing weather patterns.” For example, he said, Swiss Re’s research shows that investing in the right infrastructure can significantly reduce the losses from floods.
“Flood protection measures such as dykes, dams and flood gates come at a price, but their financial benefits can exceed costs for rebuilding after a disaster by up to 10 times, according to our research,” he said. “Much of the adaptation needed is local – for example projects to prevent coastal erosion, buttress ports against wind and waves or to shield vulnerable cities from intensifying flooding or heatwaves.”
According to Richards, the insurance industry has three distinct roles critical in the move to ensuring a more sustainable infrastructure investment framework. Firstly, he said, it can do so by leveraging data and analytics. In this way, re/insurers provide insights that can help risk owners understand and reduce future risks and adapt to them. “This is particularly important in the UK where people continue to inhabit and build in coastal towns where rising sea levels pose an imminent threat.”
“Secondly,” he said, “our industry enables investments in climate resilience through offering financial protections. Including insurance at the planning and design stage can help enable the building of resilient infrastructure, as insurance provides financial protection against delays and damage, so projects can remain on time and within budget.
“And thirdly, re/insurance can absorb the remaining risks that cannot be fully mitigated, supporting economic stability and growth after disasters.”
Public-private partnerships, such as the Flood Re scheme, are an essential piece of this resilience puzzle, he said. Created by the UK government and insurance industry, Flood Re has helped to address the flood protection gap at a national level, providing affordable insurance to homeowners living in areas with higher flood risk.
“The scheme has also gone a long way to investing in vital physical adaptation measures, such as dams, while the insurance industry steps in to insure the remaining tail risk,” he said. “In doing so the scheme has so far protected about 500,000 homes in the UK.”