Christmas 20 years ago: Storms Lothar and Martin wreak havoc across Europe

The end of the 20th century was marked by two colossal storms. On 26 December 1999, Storm Lothar hit the mainland from the Atlantic and within a few hours was moving at more than 120 miles per hour across France, Switzerland and south-west Germany, leaving devastation in its wake. And Storm Martin wasn't far behind, arriving just one day after Storm Lothar had made its mark. Martin moved south from France into Spain, Corsica and northern Italy, with peak speeds of up to 120mph.

A trail of devastation

140 people lost their lives during the two storms and the subsequent cleanup, particularly in forests in France, Germany and Switzerland. During their rampage, Lothar and Martin snapped 200 million cubic metres of woodland like twigs.

Lothar resulted in economic losses of more than EUR 15 billion, with EUR 8.6 billion – more than half the total figure – being paid out by insurers. The damage caused by Martin totalled EUR 6 billion, of which EUR 3.4 billion was covered by insurance companies. 

France hit by both storms

Both storms started off the French Atlantic coast and hit land in western France. Of the 140 deaths in Europe, 88 lost their lives in France alone.

The country also saw disproportionate damage to its infrastructure: The storms ravaged around 60 percent of the roofs in the Paris region and damaged over 80 percent of the buildings in the surrounding cities. 140 million cubic metres of forest were destroyed.

More than 200 electricity pylons were toppled, leaving more than three million households without electricity for days. In total, more than three million claims were lodged at insurance companies in France. Some insurers didn't have the capacity to pay out settlements for the damage.

The path of Lothar and Martin through Europe

Surface weather map, 27 December 1999

The map shows Lothar as it loses momentum over eastern Europe, while Martin approaches from the Atlantic. Source: Swiss Re, Storm over Europe. An underestimated risk

Why was it the storm of the century?

Before Lothar and Martin swept across Europe, hurricane Daria in 1990 was the most expensive storm to date. Lothar is not only one of the world's most expensive storms in the last 50 years, but is also classified as the most severe storm in Europe since 1876 and also caused the most forest damage ever recorded in Central Europe.

The next major storm is bound to come

The 1999 storm cluster brought several companies or entire markets to the limits of their financial capabilities. This underlines how important it is to prepare for these peak events. Experience has shown that several areas are critical:

  • Unexpected aggregation can take place via the specific event definition in a reinsurance contract (e.g. a 72-hour clause). 
  • Reinsurance products such as CatXL covers with one or more reinstatements, drop-down mechanisms (e.g. lower retention for second events), or Aggregate XL covers can be affected by more than one strong storm hitting during one and the same contract period.
  • Clustering generates large losses and therefore has a substantial impact on solvency considerations. Nowadays, regulators request that insurance companies provide their own view of how storm clustering affects their portfolio. 
  • Claims inflation can lead to substantial loss amplification.
  • Processes become overwhelmed with the vast number of claims.

We need to prepare for these high-severity events now. Swiss Re is here to help you in this endeavour. Together we make sure you and your clients have the resilience to withstand the next severe winterstorms.

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