Winter storms Lothar and Martin
Profile
|
Event date |
|
25 – 27 Dec 1999 |
|
Countries |
|
France, Switzerland, Germany |
|
Affected areas |
|
Western Europe |
|
Fatalities |
|
> 80 |
|
Economic loss |
(Lothar/Martin) |
USD 12.8 bn / USD 6.4 bn |
|
Insured loss |
(Lothar/Martin) |
USD 6.2 bn / USD 2.6 bn |
|
Reinsured loss |
(Lothar/Martin) |
USD 3.8 bn / USD 1.6 bn |
Event description
At the end of December 1999, the two most severe winter storms since 1990 raged across Europe, after Denmark had already been hard hit by Anatol on 3 December. On 26 December, Lothar crossed northern France, southern Germany and Switzerland within a few hours, leaving a path of destruction. The next day, Martin passed through further to the south, also causing heavy losses in central and southern France, northern Spain, Corsica and northern Italy.
The high speeds of both storms were attributable to unusually heavy westerly winds. Lothar attained its maximum intensity on the French Atlantic coast, maintaining its force far inland. Peak gust velocities reached 170 km/h in the heart of Paris and more than 180 km/h at Orly airport, or 20% above the maximum wind speed on record. Even before Lothar died out over Eastern Europe, another powerful storm, Martin, reached the west coast of France at the latitude of La Rochelle. While Martin crossed the country about 200 km south of Lothar's track and registered weaker peak gusts, wind speeds of some 160 km/h and 140 km/h were registered in Vichy and Carcassonne, respectively.
Loss characteristics
Particularly in France, but also in southern Germany and Switzerland, losses triggered by Lothar and Martin were paralleled only by the storms of 1990. Casualties exceeded 80, not counting the lives claimed in the course of cleanup work. Some 44 of these fatalities occurred in France alone, while 17 were reported in Germany and 13 in Switzerland – collectively an exceptionally high death toll for a winter storm. The storms ravaged some 60% of the roofs in the Paris region and damaged more than 80% of the buildings in surrounding towns, some of them substantially. Countless greenhouses were destroyed and several construction cranes were blown over.
Forests also sustained tremendous damage: in France, Germany and Switzerland, for example, the storms toppled several times the average annual timber yield. Power supply, which is not insured, was also affected more seriously than ever before: in France alone, Lothar blew over more than 120 large power supply pylons (the combined total with Martin exceeded 200), leaving more than three million households without power for days. Overall, more than three million claims were filed with insurance companies in France, leading to claims settlements which exceeded the capacity of some insurers.
Insured storm losses by country (USD bn):
| Lothar | Martin | |
| France | 5.0 | 2.3 |
| Germany | 0.75 | |
| Switzerland | 0.45 | > 0.12 |
Lothar and Martin generated economic losses of some USD 12 bn and USD 6 bn, respectively. Of these amounts, USD 6.2 bn (Lothar) and USD 2.6 bn (Martin) were insured, while USD 3.8 bn (Lothar) and USD 1.6 bn (Martin) were reinsured. These sums are in the top range of losses caused by winter storms in Europe to date and can be compared only with those triggered by the series of winter storms in 1990 (Daria, Herta, Vivian and Wiebke).
Insurance aspects
Lothar and Martin again confirmed that insured storm losses in USD billions are not infrequent. Although Lothar – with USD 5.0 bn in France and USD O.45 bn in Switzerland – exceeded the peak losses caused by the 1990 storm series many times over, the loss extent throughout Europe came as no surprise. Three storms with insured losses per event of at least USD 4 bn have already been registered since 1987, with Lothar and Daria heading the series at USD 6.2 bn and USD 5.8 bn, respectively (adjusted to current price levels).
Major historical events and insured losses:
| Date | Event | Area affected | Main area |
Insured loss (in USD bn) |
Return period (years) |
| 2./3.1.1976 | Capella | UK, NL, B, D | UK | 1.2 | > 5 |
| 16.10.1987 | 87J | UK, F, NL | English Channel | 4.3 | 5 |
| 25.1.1990 | Daria | Europe | F, D, UK | 5.8 | 8–10 |
| 3./4.2.1990 | Herta | F, D | Paris | 1.1 | < 5 |
| 26.2.1990 | Vivian | UK, F, NL, B, D | North Sea coast | 3.4 | < 5 |
| 28.2.1990 | Wiebke | D, CH, A | S. Germany | 1 | < 5 |
| 21.1./2.2.1995 | Div.storms | N. Europe | D, F, B, NL | 1 | < 5 |
| 3./4.12.1999 | Anatol | DK, D, UK, SW | DK | 1.5 | < 5 |
| 26.12.1999 | Lothar | F, D, CH | Paris | 6.2 | 8–10 (F: 70) |
| 27.12.1999 | Martin | F, CH | Bordeaux | 2.6 | < 5 |
Examinations of as-if losses over the last 50 years show that storm events involving losses of greater than USD 1 bn and a return period of 2–3 years must be expected more frequently than has generally been assumed throughout Europe. Swiss Re expects losses of Lothar’s magnitude to occur every 8–10 years. Insurers and reinsurers who base their risk management only on the most recent loss experience vastly underestimate the storm risk, since insured storm losses of a USD 30 bn magnitude are entirely realistic for Europe, and they occur on average once every 100 years.
The often overly optimistic assessment of the storm risk in the insurance and reinsurance markets received additional momentum after 1990 through the temporary absence of major storm losses. This inaccurate risk perception and the general glut of reinsurance capacity have caused prices in storm reinsurance to erode drastically since 1994, leaving price structures at an entirely inadequate level from an underwriting perspective. In all the European storm markets, premiums are now far from sufficient to cover loss payments in the long run. Reinsurers are no longer able to achieve the margin they need for the risk capital they provide. Analyses conducted by Swiss Re clearly show that, on average, prices for European storm covers should clearly be at twice the current level.
Publication: Storm over Europe - an underestimated risk
