UK insurers face multi-million dollar payout over storms Eunice & Dudley

UK insured losses from powerful wind storm Eunice that swept across Northern Europe late last week, causing extensive damage to property and vehicles, is expected to run into hundreds of millions of dollars, according to early estimates of industry analysts.

Strom Eunice developed over Ireland before passing over part of the UK on Friday (February 18) and tracking onwards to the Benelux, northern France and continuing its route towards German and Denmark.

Eunice arrived just two days after Storm Dudley caused chaos across the UK with 81mph winds triggering widespread power outages and travel disruption.

According to Moody’s, the impact and costs of the recent flurry of storms to insurance companies is expected to be at least £400 million ($545 million).

“Storms Dudley, Eunice, and Franklin could cost UK insurers more than £400 million in claims, primarily impacting those providing property coverage to homeowners and businesses,” said Moody’s analyst Dominic Simpson.

“Considering the impact on insurers of similar-sized storms in the past, we believe that whilst denting their weather loss budgets, UK insurers on the whole should be able to comfortably absorb these losses within their earnings during 2022,” Simpson noted.

Analysts at PwC have estimated the combined UK losses to reach up to £425 million.

Based on the areas impacted and the recorded wind speeds, PwC expects the insurance losses for Storm Dudley to be between £40 million to £75 million.

“The insurance losses will mainly be in respect of damage to homes, commercial properties and vehicles from falling trees and flying debris,” PwC UK’s general insurance leader Mohammad Khan said of Dudley.

Storm Eunice initial loss estimate is expected to be between £200m to £350 million due to property damage, business and travel disruption, it said.

“Based on the high winds which have led to damage to homes and commercial buildings plus extensive travel disruptions, we estimate that the insurance losses for Storm Eunice will be between £200 million to £350 million,” said Khan.

“It was expected that Storm Eunice would be severe and we’ve seen the strongest gusts impacting coastal areas as well as travel disruption with airlines and train operators cancelling flights and entire rail lines impacting travel across the country.”

Did you get value from this story?  Sign up to our free daily newsletters and get stories like this sent straight to your inbox.