Munich Re on Winter Storm Kyrill: "Typical for a warm winter" Storms with such a dimension of loss occur more frequently in statistical terms than once in ten years

2007/01/19

Reinsurance

Winter Storm Kyrill crossed central Europe at wind speeds far exceeding 100 km/h on a widespread scale and over 200 km/h in exposed mountain areas. The countries worst hit by the storm were Germany and the United Kingdom. It also affected the Benelux countries, Austria, Poland, the Czech Republic, and to a lesser degree Switzerland. An estimate of the insured losses and the cost of claims for the Munich Re Group will only be possible in a few days at the earliest.

At first glance, Kyrill can best be compared with Daria, which was the worst in the 1990 series of winter storms in Europe and caused insured losses amounting at that time to €4.4bn. This is the conclusion drawn from preliminary analyses by Munich Re's Geo Risks Research team. However, there are differences between these two storms, particularly with regard to the duration and geographical focus. Kyrill was an event that lasted an extremely long time. In some regions of Europe, gale-force winds (with speeds of 63 km/h and above) prevailed for more than 24 hours. Unlike Daria, Kyrill also hit parts of eastern Europe. Western parts of Germany, on the other hand, were struck less severely by yesterday's storm than by Daria.

The differences to Lothar (1999), the most costly winter storm to date with losses of almost €6bn at that time, are more pronounced. The wind speeds recorded during Lothar were higher over much smaller areas, but the storm itself was not as extensive. Lothar mainly caused losses in France and the southwest of Germany.

The probability of severe winter storm events is steadily increasing in Europe because the winters are tending to get warmer as a result of climate change. The typical cold high-pressure systems over eastern Europe and Russia that usually act as a barrier to the low-pressure systems advancing from the Atlantic are becoming less common.

The intervals between severe windstorm loss events in Europe have latterly been shorter than ten years. The most destructive winter storms occurred in the years 1990 and 1999.

Prof. Dr. Peter Höppe, head of Geo Risks Research at Munich Re: "Kyrill has confirmed our recent forecast that this year's unusually warm winter will go hand in hand with a particularly high windstorm risk. It fits into the pattern of climate change, which, in the long term, will intensify weather extremes in Europe too. Winter storms in particular will probably tend to be stronger."

Münchener Rückversicherungs-Gesellschaft
signed Dr. Jeworrek           signed Küppers

The Munich Re Group operates worldwide, turning risk into value. In the business year 2005, it achieved a profit of €2,743m, the highest in its 126-year corporate history. In 2005, its premium income amounted to approximately €38bn and its investments to around €177bn. The Group is characterised by particularly pronounced diversification. It has approximately 38,000 employees in over 50 countries throughout the world and operates in all lines of insurance. With premium income of around €22bn in the year 2005 from reinsurance alone, it is one of the world's leading reinsurers. Its primary insurance operations are mainly concentrated in the ERGO Insurance Group, the second-largest provider in the German primary insurance market and a leading player in several other European insurance markets both in health insurance and legal expenses cover.
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This media information contains forward-looking statements that are based on current assumptions and forecasts of the management of Munich Re. Known and unknown risks, uncertainties and other factors could lead to material differences between the forward-looking statements given here and the actual development, in particular the results, financial situation and performance of Munich Re. The company assumes no liability to update these forward-looking statements or to make them conform to future events or developments.

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