Munich Re Estimates Kyrill Losses at $775 Million

Based on current estimates, Munich Re expects pretax losses from Windstorm Kyrill to be around €600 million ($775 million). The estimates include claims relating to the Group’s primary insurance subsidiary ERGO.

Munich Re’s estimate of overall insured market loss is between €5 to €7 billion ($6.46 to $9 billion), “which,” it said “represents a preliminary assessment on the basis of several methods of estimation. On account of the extremely large number of small and mid-sized losses still to be evaluated, establishing the definitive loss amount requires considerable effort and will still take some time. For this reason, any forecasts regarding the losses to be expected from the winter storm continue to be a matter of considerable uncertainty at this time.”

Kyrill hit Germany the hardest, but Munich Re also acknowledged that there “were also high losses in the United Kingdom, the Benelux countries, Austria, Poland, the Czech Republic, and to a lesser degree Switzerland. The expected loss burden as a whole therefore reflects Munich Re’s large share of the reinsurance and primary insurance market in Germany, its home market.”

The loss estimates also include Munich Re’s anticipated share of the claims arising from the loss of the container ship MSC Napoli, which went aground off the south coast of England. “This loss is likely to be in the low-to-medium two-digit million range,” said the bulletin.

The storm swept across Europe from Ireland to Russia, often with wind speeds exceeding 100 km/h (60mph). Munich Re noted that “owing to the size of the area affected and the duration of the storm — with gale-force winds prevailing for more than 24 hours in some places — Kyrill caused numerous losses over a wide area.”

Board member Torsten Jeworrek commented: “Kyrill is a further illustration of the high loss potential from winter storms in Europe. The storm losses were within the range to be expected on the basis of our risk models. The increasing risk from winter storms in the wake of climate change is something the insurance industry must always consider prospectively in its calculations.”