Friederike/David: The Day Our Luck Ran Out?

Little more than a week ago, I signed off my previous blog post, discussing storm Eleanor/Burglind, with the following thought:

As the number of minor windstorms impacting Europe this season grows, we are left to wonder how many more “near misses” can we experience before our luck runs out?

At the time, I further noted that:

  • One-day-out, the forecasts for Friederike were trending towards lower and lower severities
  • As an immature and fast-moving system, these forecasts were subject to high uncertainty
  • Eventual losses would be very sensitive to gust speeds experienced in urban areas near to the forecast footprint, such as Rotterdam and Dortmund

In the week since this post, it has become clear that our lucky streak has already come to an end. Storm Friederike (also named David by Météo-France) intensified towards the upper end of the forecast severities in Benelux and Germany, bringing strong gusts to highly populated areas and producing significant insurance losses.

Friederike: Meteorology and Impacts

Storm Friederike can be traced back to a weak near-surface cyclone which formed off the northeastern seaboard of the United States in the latter part of January 15, 2018. Upon moving into the northwest Atlantic during January 16, it encountered strong westerly winds formed by a deep low near Iceland and a strong anticyclone centered near the Azores. These strong steering level winds caused the system, still at this stage a weak cyclone, to speed across the Atlantic at slightly above 100 kilometers per hour.

Friederike’s location relative to the jet became more conducive for storm intensification during the afternoon of January 17. The system’s central pressure deepened by 15 hPa during the next 12 hours as it passed over Ireland and the U.K., first reaching its minimum pressure of just under 980 hPa while crossing the North Sea on its path toward mainland Europe (see figure 1 below).

Pressure gradients are only part of the wind story for this type of storm, and this very modest central pressure belied Friederike’s strength. The fact that it had recently scraped into the weather bomb category (dropping more than 24 hPa over the previous 24 hours), and the swiftness of its Atlantic journey were both significant contributors to its local winds.

Although Frederike’s translation speed may have slowed to around 75 kilometers per hour as it hit the Netherlands then Germany, this remained sufficient to produce very damaging gusts over areas of dense exposure.

Figure 1: Deutscher Wetterdienst (DWD) Surface Pressure Chart at 06:00 UTC on Thursday, January 18, 2018.

Peak gusts of over 30 meters per second were felt widely in a 150 kilometer wide corridor stretching from East Anglia in the U.K. to Saxony in eastern Germany; crossing northern Belgium, southern/central Netherlands, and North Rhine-Westphalia. Critically, the strongest gusts in the storm encompassed several areas of high exposure. Stations close to Amsterdam and Rotterdam registered 34 meters per second; whilst gusts in the low-to-mid-30s meters per second were felt widely in North Rhine-Westphalia, around Münster and Düsseldorf.

RMS have released accumulation footprints and stochastic event selections for this storm (accessible on the Event Page on RMS Owl) to help our clients estimate likely levels of portfolio loss from this event. The stochastic event selections further help to understand the significant uncertainty that inevitably surrounds estimates of loss so soon after a European windstorm event. Despite the outstanding loss uncertainty, our modeling products show that this storm is very likely to cause industry property losses of greater than €1 billion across Europe.

Third-party estimates of loss from this storm also point to this storm being the first billion-Euro loss of the season. The GDV yesterday released an updated loss estimate of €1 billion for Germany alone, consistent with estimates of German loss produced by MSK Actuaries (€800 million) and Aon Benfield (€1 billion).

While Germany is the dominant contributor of loss to this event, the storm also caused significant damage in Benelux. In the Netherlands, the VvV issued an early loss estimate of €90 million for residential and auto lines (which could scale to around €150 million+ for all lines), and for Belgium, AG Insurance issued a loss estimate of €50 million.

Footage of storm Friederike affecting the Netherlands. Credit: YouTube/Natural Disasters

All the evidence thus points to this being a significant event, likely to drive one of the largest losses seen in Europe over the last decade. However, it is important to note that the last decade has been a period of low windstorm activity in much of Europe (more on this below), and that this storm does not come close to the levels of loss caused by the largest historical European windstorms like 87J (1987), Daria (1990) and Lothar (1999). Friederike losses are also likely to fall a long way short of those experienced during storm Kyrill in 2007. Rather, it would be appropriate to consider this storm alongside moderate but significant loss events from the past decade such as Klaus (2009), Xynthia (2010), Christian (2013) and Mike-Niklas (2015).

2017/18 Windstorm Season: Losses Continue to Aggregate in Germany

Losses from storm Friederike are strongly concentrated in Germany, where three less severe storms have already caused insured losses this season: Xavier (October 5, 2017), Herwart (October 9, 2017) and Burglind (January 3, 2018). Given the level of expected damage from Friederike, aggregate losses for the season so far in Germany now approach the eightieth percentile of modeled storm seasons. Thus, if the rest of the season were to pass without further incident, it would have a return period of around five years in Germany.

Based on our experience this century, the current season perhaps feels more exceptional than a return period of five years. This cognitive dissonance can be resolved by considering the climate variability of European Windstorms.

Observed windstorm losses in Europe show significant variability, over a range of timescales from seasonal to multidecadal. The multidecadal variability in windstorm losses observed over the last 50 years is significantly larger than the level of future variability that can be confidently forecast for the next 50 years due to climate change — making this a critical topic for understanding European Windstorm risk. To assist our clients in this regard, RMS provides an additional rate set which samples this long-term climate variability, and have authored two research papers outlining the importance of short- and long-term climate variability for insurance risk management.

When considering the historical context for the current windstorm season it is natural to compare against our most recent experience (perhaps that period covered by our claims datasets), and to conclude that this season to date may be exceptional in Germany. However, in common with much of Western Europe, Germany was notably stormier in the 1970s to early 1990s than it has been since. This is reflected in estimates of historical insured losses, for instance the average annual loss (AAL) for the last 10 to 20 years in Germany is only 50 to 60 percent of the longer term AAL (1970s to the present).

We have no forecasting skill around this long-term variability of European Windstorm activity, and so we could return to a stormier period at any time. This means that sound risk management decisions must consider the full longer-term historical picture, despite the discomfort which comes from realizing that shorter claims datasets may not tell the full story. When we consider this longer-term picture, we can see that the 2017/18 season to date in Germany has been stormy, but not exceptional.

Product Manager, Model Product Management

Peter is a Product Manager in the Model Product Management team, focusing on RMS Europe Windstorm Models. He joined RMS in 2012 and spent several years as an Account Manager, supporting RMS reinsurance intermediary clients, before taking up the role of Product Manager during the Version 16.0 Europe Windstorm clustering project. Peter joined RMS upon completion of his PhD in Earth Science from the University of Bristol.

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