Europe Counts Storm’s Costs, as Clean-up Begins

January 13, 2005

California isn’t alone in trying to cope with deadly weather. Northern Europe has been lashed by the most powerful storm to hit the continent since Lothar and Martin ravaged France, Switzerland and Germany in 1999.

This time, due to a high pressure ridge over the Atlantic, the tempest struck further north, but it was just as powerful, packing winds over 150 kmh ((90 mph) and it moved more slowly. The storm hit northern England and then moved on to Scandinavia and the Baltic Sunday and Monday (See IJ Website Jan. 10). 14 People died – 7 in Sweden; 4 in Denmark and 3 in the U.K., as the storm snarled transportation links and knocked out power lines.

The area’s forests were especially hard hit. According to news reports high winds felled more than 60 million cubic meters (600 million cubic feet) of lumber, placing the region’s wood products industry in jeopardy. Swedish officials called the storm the worst to hit the country in over 100 years and estimated wodd producers’ damages at 13 to 30 billion kronor ($2.1 to 4.3 billion). As in France in 1999, the oversupply of wood, which has to be disposed of before it rots, is expected to greatly depress the market.

It’s estimated that about 60 percent of the forest owners in the Swedish wood industry had some kind of insurance covering storm damage, but the remaining 40 percent apparently only carried fire insurance. Forests in Latvia and Estonia also suffered heavy damage, and most were not insured.

So far the only official preliminary estimate of insured losses has come from Finland’s Pohjola. The company said its non-life insurance business expected claims from the storm to be around 5 million euros ($6.6 million). Unofficial estimates of overall losses were around $72 million in Sweden and around $176 million in Denmark.

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