Climate change and windstorms

The world’s climate is changing and the frequency of storms is impacted by variability in the climate. In 2017, the ABI together with catastrophe modeller AIR Worldwide and the Met Office collaborated on research into UK windstorms.  The research considered what effect global temperature increases of 1.5, 3 and 4.5°C would have on the frequency and intensity of UK windstorms.

The research highlighted that temperature increases of just a small number of degrees could lead to a large increase in insurance losses.   These increased losses would not be spread evenly across the country but would more likely to be concentrated in Northern Ireland, northern England and the Midlands, with southern England potentially seeing decreasing losses from storms.

This is based on Met Office analysis which shows that even small increases in temperature are likely to shift stronger winds further north. The full report can be found here.

Matt Cullen, Head of Strategy at the ABI, said: “Concerns about global warming often focus on rising water levels and the threat of flooding but this new research makes it clear the impact of other meteorological events such as high winds must not be overlooked.”

Extreme weather events are difficult to predict in advance. However, it is possible through analysis of vast volumes of historical data to understand and highlight the areas that are more at risk. Investing in technology and data models that are based on accurate, up-to-date information and that take account of changing risk patterns to gain a deeper insight into risk is crucial for insurers to ensure they are not selected against or over exposed in high risk areas.

Business Insight has Storm models for both residential and commercial properties.  Based on extensive research and the largest source of storm claims information available in the UK, the Storm Insight© models consider the variation in peak wind gusting across the UK together with factors such as topography, urban density, the local built environment and the likely state of repair of buildings to predict annualised loss estimates right down to individual property level. The models have been calibrated using over 72 million windspeed recordings focussed on areas where the UK’s insured population lives and use information supplied by a market leading supplier of weather information to the UK insurance industry.

To find out more, please contact your Account Manager or contact us on 01926 421408.

Stormy times ahead for Insurers

December to February is typically the time of year when the most windstorms occur across the UK. At the beginning of December, Storm Caroline hit the UK causing high winds which mainly affected Western Scotland and Northern Ireland and leading to power cuts to 49,000 homes.  Storm Dylan brought with it strong winds and snow, leading to travel chaos.

Storm Eleanor battered parts of  the UK and Northern Europe at the beginning of January. The Met Office recorded gusts of up to 100 mph in Great Dunn Fell in Cumbria and huge waves of up to 26 feet were recorded in Devon and in Cornwall, a harbour wall was completely destroyed.

The ABI, AIR Worldwide and the Met Office have done some research into the impact of climate change on windstorm events.  The report found that even a small rise in temperatures due to climate change is projected to lead to more insurance losses as a result of high winds.

The analysis indicated that the increased losses are not spread evenly across the country but are likely to be concentrated in Northern Ireland, northern England and the Midlands.   The full report can be found here.

An increase in the frequency and severity of storm events will inevitably place a greater burden on the insurance industry.  Matt Cullen, the ABI’s Head of Strategy commented: “The likelihood of claims resulting from severe storms increasing in the future is something the insurance industry, and society, need to start preparing for now. Planners and builders should be aware of the need for more wind-resistant construction in specific areas of the country if claims are to be kept to a minimum and residents spared the distress and expense of higher levels of wind damage.”

Having a greater understanding of storm risk for a particular location allows insurers to mitigate this risk in their pricing and improve profitability.  Business Insight has built storm models for both residential and commercial properties in the UK which provide a new level of insight into the distribution of storm risk.

The probabilistic models predict which addresses are most likely to experience claims through damaging winds from future storm events.  Based on state-of-the-art mathematical modelling and extensive computing power and combined with over 80 million historic windspeeds recorded in urban areas from across the UK. The analysis of property vulnerability is also taken account of across 26 million homes and 1.7 million postcode locations.

Considering the variation in peak wind gusting across the UK together with factors such as topography, urban density, the local built environment and the likely state of repair of buildings the model can be used to predict annualised loss estimates right down to individual property level.

Benefits for insurers include an unrivalled level of granularity for a deeper understanding of exposure to storm claims in the UK across a book of business and the ability to easily discover areas where rates need modifying to improve storm loss ratios.  It can be supplied in a number of formats and is easily integrated with existing systems.

Contact us for more information on 01926 421408.