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Repeat of the Great 1987 Windstorm Could Cost up
to £7 Billion in Insured Loss
Newark, C.A. – October 15, 2007 – Twenty years since the great
windstorm that hit southern England and northern France on October
15-16, 1987 with unexpected ferocity, Risk Management Solutions (RMS)
has researched the impact of a repeat of the event today. Detailed
analysis reveals that a windstorm of similar magnitude striking the
region in 2007 would result in insured losses ranging between £4 billion
and £7 billion ($US8 billion and $14.5 billion) across Europe. Of this, some 70%
would be generated in the U.K. — over 2.5
times the £1.4 billion ($US2.3 billion) cost incurred in 1987.
“Not only has inflation pushed up property prices since 1987, but there
has been around a 20% increase in the number of households in the areas
of Britain affected by the storm. In 1987, approximately 7.5 million
households were located in the storm’s destructive path across London,
the southeast and east of England, and now this would be over 9
million,” commented Dr. Barbara Page, senior model manager for European
windstorm modeling at RMS. “Commercial property and infrastructure
investment in the region has also rocketed, and the cost of construction
has more than doubled, so there would be a dramatic hike in rebuilding
costs from twenty years ago.”
It is well known that the storm was poorly forecast, partly because of
the dearth of observations offshore where the storm developed, and
partly due to the nature of the storm itself. “While contemporary
forecasting models are becoming increasingly sophisticated, events like
the October 1987 windstorm, which was an extra-tropical cyclone with
hurricane-force winds, remain very difficult to predict,” said Dr. Page.
While the Great Storm of 1987 was widely acknowledged as Britain’s most
severe since 1703, losses would have been far higher if it had struck
just tens of kilometers to the northwest of its actual path, taking a
direct hit on London and the densely populated M4 corridor to the west.
In the worst case analysis, losses could reach as much as £9 billion
($US 18.5 billion) in the U.K. alone.
Although the worst affected areas of the October 1987 windstorm are only
likely to experience such high winds once every 200 years, the
probability of insurers incurring the same level of losses from a storm
is once every 35 years. RMS analysis shows that less severe but more
widespread storms, such as Windstorm Daria in January 1990, can actually
cause greater insured damage than powerful but more concentrated events
like the 1987 windstorm.
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