Losses From Europe's Storms Could Reach an All-Time High.

Two intense windstorms that recently struck Western Europe have caused insured losses that could exceed 5 billion euro--resulting in nearly unprecedented levels of insured losses in France, according to French insurer Scor.

Scor said it made its overall estimate of the storms' impact based on a computer model for damage assessment from natural disasters, after contacting weather services across Europe.

Scor said the storms, which struck Dec. 26 through Dec. 28, would have a 50 million euro impact on its own net results as well. It also said it expects a "significant increase in premium rates" next year.

Christian Jacobi, a spokesman for Germany's Munich Reinsurance Co., Europe's largest reinsurer, said total insured losses from the storms would be less than the $10 billion tab from a series of eight winter storms that pounded Europe in 1990. He said the most recent storms, Lothar and Martin, were shorter in duration and affected a relatively small area, carving a path less than 200 miles wide.

But Jacobi said France would bear the brunt of the claims. "Losses must be very high, especially because this time Paris was hit," he said.

A major issue for insurers and reinsurers is whether the storms will be considered as one or two events, Shaun Flynn, senior vice president for the international division of A.M. Best Co., said. That designation could affect some terms of coverage.

Regional mutual insurance companies will likely be the hardest hit by the storm losses, and there will be greater pressure for increases in insurance and reinsurance rates, Flynn said.

Hiscox plc, an integrated Lloyd's insurance vehicle, said European storm damage wouldn't have a major effect on its financial health because it had a foreseeable amount of claims from the "storm of the century" and was adequately covered by reinsurance, Reuters reported.

Hiscox reportedly said the event should hit the industry hard enough to increase rates charged by competitors, and "may shake some of the looser ones out of the class."

Risk Management Solutions Inc. said reconnaissance teams surveying damage in France reported "unprecedented" levels of losses. In addition to millions of downed trees and damage to national monuments, RMS said more than 10% of buildings in affected areas had roof damage. In central Paris, about 60% of buildings suffered some degree of roof damage, and in some towns m eastern France nearly all buildings showed some form of damage.

Never before has a storm of this intensity passed directly over Paris, the region of the highest insured exposure in France, the company noted.

EQE International, a risk-management company, estimated direct economic losses at $10 billion euro.

Insured losses from the two storms will not exceed losses from Windstorm Dana in 1990, which ranks as the most expensive insurance industry event ever in Europe, EQE said.