AIRCurrents
Looking Back, Looking Forward:
Anatol, Lothar and Martin
Ten Years Later
Editor’s note: Ten years ago this December Europe was subjected to
three fiercely intense storms in rapid succession, Anatol, which arrived on
December 3rd, Lothar, which struck on December 26th, and Martin, which
12.2009
immediately followed Lothar on December 27th. Together the storms brought
much of Europe to a halt, killed more than 160 people, wreaked widespread
damage and inflicted catastrophic insured losses of more than ten billion
Euros (1999). In this article, Managing Director of AIR’s Munich operations,
Yörn Tatge, describes the events, notes their impact on the insurance industry
and addresses the continuing importance of European winter storms.
By Yorn Tatge
When Anatol, Lothar and Martin arrived to batter Europe
at the end of 1999, severe European winter storms were
thought to be relatively rare. And only ten years earlier
the continent had been subjected to a similar series of
destructive storms—too recent to expect another such
occurrence. Consequently, the European insurance industry
was ill-prepared for Anatol, Lothar and Martin’s disastrous
arrival.
clusters, the cumulative losses can be staggering. Anatol,
Lothar and Martin exhibited just this scenario of lengthy
tracks, serial passage—and high insured losses.
Anatol, Lothar and Martin
Anatol
Winter storm Anatol began its life at the end of November,
1999, at the intersection of two minor meteorological
perturbations south of Greenland, one moving out from
Newfoundland, the other from Labrador. The interaction
of these air flows rapidly developed into an extratropical
cyclone. On December 2nd Anatol was west of Ireland,
by the early morning hours of December 3rd it was over
Scotland and by that afternoon it was over Denmark—
raking the country with the strongest winds to strike it in a
century. Anatol also impacted Sweden, Germany, Poland,
Lithuania, Latvia and Russia. Twenty people were killed and
600,000 individual insured losses were incurred, amounting
to slightly more than €2 billion1 (in 1999 Euros).
Although no single European winter storm is likely to cause
as much damage as an intense Atlantic hurricane that
makes landfall in or near a major city, European winter
storms are quite capable of causing overall insured losses
comparable to Atlantic hurricanes. Their size and ability
to travel long distances over land while maintaining their
intensity can produce total losses similar in amount to
those of a catastrophic hurricane. When they come in serial
Lothar
Just three weeks after Anatol, an otherwise unremarkable
disturbance became caught up in a confluence of strong
westerly winds and an intense jet stream to the east of
Newfoundland—and was carried across the Atlantic at
speeds that reached 130 kilometers per hour. Coming to
a region of strong divergence that had developed earlier
The three storms initiated a change in attitude and,
together with a series of other severe storms over the
decade that followed (Jeanette in October 2002, Erwin in
January 2005, Kyrill in January 2007, Emma in March 2008
and Klaus in January 2009), they accelerated research into
the nature of extratropical cyclones, or winter storms, in
Europe.
AIRCurrents
12.09|Looking Back, Looking Forward:
Anatol, Lothar and Martin Ten Years Later
By Yorn tatge
between Brittany and Cornwall, the depression intensified
almost explosively into extratropical cyclone Lothar. With
winds at times gusting above 210 km/h, Lothar crossed the
Normandy coast in the early hours of December 26th. In
less than 12 hours it raged across northern France, battered
Belgium, tore through Germany, and only when nearly halfway across Poland, finally weakened. Just 300 kilometers in
diameter, Lothar’s compact internal pressure gradients were
comparable to those of a Category 2 hurricane.
Lothar brought wind gusts of 170 km/h to Paris and 150
km/h to Karlsruhe, Germany, some 450 km from landfall. In
its passage, Lothar killed 110 people and caused €5.9 billion
in insured losses2 (1999 Euros).
Martin
One day later, in the mid-afternoon of December 27th,
winter storm Martin crashed ashore in the vicinity of La
Rochelle—about 200 km south of Lothar’s landfall. Martin’s
genesis, passage across the Atlantic, and rapid development
into an extratropical cyclone paralleled Lothar’s. On land,
Martin moved rapidly over central France, cut across
Switzerland, through Alpine Italy, and then began to
dissipate as it approached the Balkans. Less intense than
Lothar, Martin nevertheless brought gust wind speeds of
190 km/h to the French coast, and as high as 160 km/h to
Vichy and 140 km/h to Carcassonne, far to the south.
the number of trees as the average annual timber yield
in France, Germany and Switzerland combined. Flooding
was reported across southern England, the Netherlands,
Belgium, France, Germany, Switzerland, Austria and Italy. In
France, a fourth of the country’s high-tension transmission
lines were lost and 300 high-voltage transmission pylons
were toppled. It was one of the greatest energy disruptions
ever experience by a modern developed country. Ten million
people across France and Germany were left without power
at the height of winter. In the environs of Paris an estimated
60% of all roofs were damaged. A state of emergency was
imposed on the city. Atop the Eiffel Tower wind speeds of
215 km/h were recorded.
Overall economic losses have been estimated to be more
than €18 billion4 (in 1999 Euros). One hundred sixty people
were killed.
Bordeaux, where gusts reached 144 km/h, was especially
hard hit. By the time Martin finished its passage, it had
caused 30 fatalities, cut off electricity to over one million
households and cost €2.5 billion in insured losses3 (1999
Euros).
Widespread Damage
European windstorms typically do not achieve the wind
speeds of the most intense tropical cyclones. However,
in the course of a single event, an extratropical cyclone
system’s damaging windfield can affect an area of tens of
thousands of square kilometers. And within that large area,
specific locations can be subjected to periods of high winds
for several days.
Anatol, Lothar and Martin brought severe damage to
thirteen countries and seriously impacted others. Europe
was affected from the United Kingdom in the west to Russia
in the east, from the Scandinavian and Baltic countries
in the north, to Spain and Italy—as far as Sicily—in the
south. The storms devastated forests, leveling several times
Figure 1. Damage from Anatol in Denmark (Source: AIR)
Insurance Fallout
Anatol, Lothar and Martin revealed several weaknesses
in the European insurance industry’s ability to respond
effectively to such widespread damage. Both the scale
of the damage and the volume of claims proved to be
problematic. Complications also arose because of the close
time proximity of the storms’ passage. And it soon became
apparent that the usability and reliability of the data the
insurance companies held were not adequate to the scale
of the disaster.
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AIRCurrents
12.09|Looking Back, Looking Forward:
Anatol, Lothar and Martin Ten Years Later
By Yorn tatge
Claims Overload
Reinsurance Coverage
The first of the storms, Anatol, had its most destructive
impact on Denmark. Before Anatol, the largest insured
loss Denmark had incurred from a storm was about €120
million, in 1981. Anatol’s more than €2 billion of insured
losses (in 1999 Euros)5 was an increase of an order of
magnitude. Claims adjusters were overwhelmed by the
number of claims they had to service, which was as large as
a tenth of the entire population of the country. To facilitate
processing this unprecedented number of claims, insurance
agents sent out claim payments up to a certain amount
of loss without even a review of the claims. The practice,
however, probably artificially increased Anatol’s actual
insured loss in Denmark.
Anatol, Lothar and Martin had a significant impact on
the reinsurance market. In Denmark, Anatol completely
exhausted many reinsurance covers. Given the perceived
low probability of a loss the size of Anatol’s and the
“recent” severe winter storms only ten years earlier, many
insurance companies decided that reinsurance protection
up to the unprecedented levels of Anatol was unnecessary.
In Anatol’s aftermath, they were hard put to pay out their
claims, creating solvency problems. (The following year,
2000, most insurance companies in Scandinavia significantly
increased the scale of their reinsurance coverage.)
The French insurance market’s experience was similar. An
estimated three million claims were filed,6 most of them
from the residential sector. And like the Danish claims
adjusters, many French insurers also paid out claims without
an expert assessment in an effort to avoid processing
bottlenecks—some using a claim threshold of several
thousand Euros.
In France, reinsurance purchasing at the time was based
on the losses incurred by the severe winter storms of 1990,
particularly the two most destructive, Daria and Herta. (In
1999, the total capacity of the French market was less than
60% of the losses from Lothar alone.7) However, the wind
speeds of Lothar and Martin were nearly 30% higher than
those of the earlier storms. Most reinsurance programs
were exhausted by Lothar alone. Total French insured losses
from the two storms came to about €6.5 billion.8
What is an Extratropical
Cyclone?
Anatol, Lothar and Martin were
extratropical cyclones. Such storms
derive their energy from the horizontal
temperature contrast—warm subtropical
air masses opposite cold, polar ones—that
exists in the mid-latitudes and is greatest
during the height of winter. Extratropical
cyclones arise along such thermal
boundaries when various local conditions
in the upper-level jet stream become
unstable and the contrasting air masses
begin to interact.
Instead of the familiar circular structure
of tropical cyclones (e.g., hurricanes),
extratropical cyclones have a more
complex structure and generally develop
two “fronts:” one where warm air
overrides cold air to the northeast of
the system’s center, and one where
cold air wedges beneath warm air to
the southwest. Some of the highest
surface winds and heaviest precipitation
usually occur along these fronts. When
fully developed, the system exhibits a
“comma” shape that can extend well
over 1000 kilometers. The swath of an
extratropical cyclone’s most damaging
winds, however, is typically about 150-500
kilometers wide.
Satellite image of Lothar (Source: NOAA)
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AIRCurrents
12.09|Looking Back, Looking Forward:
Anatol, Lothar and Martin Ten Years Later
By Yorn tatge
Clustering
Reinsurance contracts typically are written to cover a
single year, and a multiple-event season can have serious
loss implications for a contract. The passage of Lothar
and Martin took place in less than 72 hours. Although a
standard 72 hours clause was in place for most contracts—
which would allow treating the two storms as a single
reinsurance recovery—there was no consistent handling
of contracts. For reasons of good will, some reinsurers
agreed to consider the two storms as separate events (thus
enabling insurance companies to receive greater recoveries).
In the end, reinsurers absorbed more than half of the total
insured losses.
To ameliorate this failing, the CRESTAplus initiative was
undertaken in 2000 to provide an open and public data
exchange standard that would allow all participants in
the industry to easily transfer high quality exposure data
back and forth. After a promising start, CRESTAplus failed
to gain wide acceptance. A second effort was begun in
2002 by ACORD (Association for Cooperative Operations
Research and Development), the insurance industry’s
nonprofit standards developer. Initially ACORD also made
few converts, but as more industry participants have come
Anatol, Lothar and Martin thus also brought to the
forefront the question of whether European winter storms
tend to “cluster” as a natural phenomenon—that is, should
clustering be considered a common occurrence, one that
would regularly, and probably often, impact contractual
obligations. In this regard, the winter storms of 1990 could
be seen to have come in two clusters, Daria and Herta at
the end of January/beginning of February of 1990 and
Vivian and Wiebke at the end of February/beginning of
March. Similarly, several of the winter storms in the years
soon after 1999 followed one another in close procession.
This phenomenon—the temporal and spatial clustering
of European extratropical cyclones—remains an active
area of research. Both the phenomenon’s meteorological
characteristics and its impact on insured losses are being
studied. AIR’s most recent findings will be incorporated into
the next release of the AIR European Extratropical Cyclone
Model.
to embrace the need for a common and open standard,
ACORD has won increasing acceptance, including by Lloyd’s
of London. AIR was the first catastrophe modeler to support
the ACORD binding authority data standard in its software.
Figure 2. Damage from Lothar and Martin in France (Source:
AIR)
Conclusion
Data Quality
Anatol, Lothar and Martin also exposed serious
inadequacies in the availability of data, data quality, and
data consistency in the European insurance industry.
Reinsurance companies found that they often could
not properly assess winter storm risk to their portfolios
because they did not have comprehensive and detailed
exposure information. The problem was not only missing
or incomplete data, but, equally, inconsistencies in how
exposure was defined and calculated—both between
countries and even within the same country.
In 1999 Anatol, Lothar and Martin caused over €10 billion
of insured losses across Europe (in 1999 Euros). The storms
inspired a new sensitivity to the serious Europe-wide
repercussions of a phenomenon that previously had been
seen largely as local. They initiated increased investigation
into the complex nature of extratropical cyclones and their
potential to cause damage. And Anatol, Lothar and Martin
revealed shortcomings in the European insurance industry:
in its ability to accurately estimate sufficient coverage, its
capacity to process large volumes of claims, and in the
quality of its data.
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AIRCurrents
12.09|Looking Back, Looking Forward:
Anatol, Lothar and Martin Ten Years Later
By Yorn tatge
Shortly after Anatol, Lothar and Martin wreaked their havoc
in Europe, AIR released a new generation extratropical
cyclone model—one that incorporated numerical weather
prediction, or NWP. It was the first time a catastrophe
model incorporated the physical (as opposed to statistical)
modeling of a meteorological peril. Subsequent generations
of the model have reflected AIR’s continued investment in
the science, the technology and in the global environmental
data on which NWP relies.
hurricanes that inundate whole cities and earthquakes that
collapse houses on sleeping people. All the same, average
annual losses from European winter storms are among the
largest caused by natural catastrophes worldwide. Instead
of causing a limited number of very high claims, European
winter storms can generate hundreds of thousands of
smaller claims that can add up to significant sums—
particularly given the high take-up rates in Europe.
Anatol, Lothar and Martin indelibly imposed this awareness
Today, when perceptions are strongly shaped by around-the- on the insurance community ten years ago and inspired
clock media coverage and on-location YouTube offerings,
new efforts by the industry to alleviate the damage caused
the damage caused by severe European winter storms looks by this major natural peril.
less dramatic and less desperate than the damage from
References
1 Munich Re Group (2002). Winter Storms in Europe (II): Analysis of 1999 Losses and Loss Potentials.
2 Ibid.
3 Ibid.
4 Ibid.
5 Ibid.
6 Swiss Re (2000). Storm over Europe: An Underestimated Risk.
7 The World Catastrophe Reinsurance Market: 2003, Guy Carpenter, September 2003.
8 Munich Re Group; op. cit.
About AIR Worldwide Corporation
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