Extratropical Cyclone Niklas

First Posting | Summary
Posting Date: April 6, 2015, 11:42:00 AM

AIR Worldwide estimates that insured losses from Extratropical Cyclone Niklas will range between EUR 1.0 billion and EUR 1.9 billion, with the majority of losses in Germany. Losses also occurred in Austria, Belgium, the Czech Republic, France, Ireland, Luxembourg, the Netherlands, Poland, Switzerland, and the United Kingdom.

Sources of significant uncertainty:

• Observation data for extratropical cyclones in Europe are from weather stations that record 3-second gust wind speeds. These measurements are strongly influenced by the very local environment of the station as well as by additional wind variability occurring within the storm. The variation in the final modeled wind footprints depends on the assumptions and methods pertaining to how 3-second wind gusts and their uncertainty are assimilated into the model and also how these values are extrapolated to areas away from weather stations.
• Due to the relatively low wind speeds (compared to hurricanes), the average claim size is expected to be low. However, the spatial extent of damaging winds is quite large for this storm and therefore claims may sum to a significant amount. In combination with the uncertainty of the wind footprint, this is a significant factor of uncertainty in potential losses.

Note that these estimates include wind damage to onshore residential, commercial, industrial, agricultural properties (and their contents), and automobiles. ALERT subscribers can download scenarios for Niklas from the ALERT website. Also available is a Touchstone®-ready wind footprint shapefile of the median scenario, as well as similar stochastic event IDs for Europe wind.

AIR’s industry insured loss estimates reflect:

• Insured physical damage from wind to property (residential, commercial, industrial, agricultural, auto), both structures and their contents

AIR’s insured loss estimates do not include:

• Business interruption and additional living expenses (ALE) for residential claims for all modeled countries, except the UK (note that clients’ business interruption exposures can be modeled in Touchstone)
• Losses to uninsured properties
• Losses to infrastructure
• Demand surge (AIR’s demand surge function is not triggered by this event)

On March 29, a low pressure system (Niklas) formed and then strengthened the next day as it moved southeastward over Europe. On March 31, Niklas developed into a strong storm centered over Denmark and the southern Baltic Sea, bringing high winds and heavy precipitation to Germany and parts of the UK. By the evening of March 31, Niklas’s cold front arrived in the alpine region of Germany, causing widespread intense precipitation and strong squalls. Recorded wind speeds for Niklas across Germany ranged from 119 km/h in various coastal areas and on Wasserkuppe, 151 km/h on Feldberg in the Black Forest, up to the maximum reported measurement of 192 km/h on Zugspitze, which is Germany's highest mountain.

Niklas continued to move eastward, causing intermittent squalls, heavy precipitation, and thunderstorms, as well as snowstorms in locations less than 500 meters above sea level. The storms felled trees that damaged vehicles and buildings, including their roofs and façades, and disrupted rail and air travel during the busy holiday season.

Gust wind speeds compared to mean wind speeds were unusually high and compare to values for Kyrill in 2007. Although the average wind speeds for Niklas are lower than for Kyrill, the extent of damaging winds is comparable, which makes Niklas one of the larger storms to have impacted Europe.

Note that the five simulated scenarios for use with the AIR Extratropical Cyclone Model for Europe reflect wind damage only.

As clients review their estimated losses from this event, AIR recommends the following best practices to enhance the interpretation and communication of results:

• Due to the unique nature of any event, clients should use the ALERT event set to estimate individual company and wind losses, rather than relying on similar events from the stochastic event catalog
• Always communicate the range of loss estimates produced by the event sets provided on the ALERT site, not just any single estimate or just the maximum
• Benchmark estimated losses against losses based on market share information and industry loss estimates when appropriate
• Present any known issues with exposure data quality that might affect the loss results
• Disclose any adjustments made to reflect non-modeled costs such as loss adjustment expenses, coastal surge, and inland flooding

First Posting | Downloads
Posting Date: April 6, 2015, 11:42:00 AM