Storms Ciara and Dennis highlight the challenge of clustered claims
Storms Ciara and Dennis, which battered Europe in February, serve as a reminder that insurers need to be prepared with systems to manage the impact of peak events, especially in relation to clusters of claims. This is according to Simon Welton, Swiss Re’s market head P&C UK & Ireland.
“Although the cost of the damage caused across Europe by storms Ciara and Dennis is still unknown, it acts as another reminder of how important it is for insurers to prepare for these peak events,” he said.
“Because damage can occur in concentrated areas, this can result in a clustering of claims, generating large losses and a substantial impact on solvency considerations. Not only can this lead to insurers becoming overwhelmed by claims, such big events can trigger claims inflation and substantial loss amplification.
“Beyond operational challenges, regulators are now also demanding that insurance companies provide a view of how storm clustering affects their portfolio. As the changing environment causes more of these sudden and violent weather events, it is crucial that that the authorities, businesses and individuals alike, look to make their properties more resilient. But just as important is the need for the insurance industry to have systems and processes in place to manage the impact on them and their customers.”
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