Never before have Dutch insurers had to pay out as much for weather damage as in 2022: 886 million euros. That is almost double the 465 million euros that the weather damage in 2021 cost them. The largest damage item was fe-bru-ari storms Dudley, Eunice, and Franklin, together good for 714 million euros. The Verbond van Verzekeraars, the trade association of Dutch insurers, wants people to become more aware of the risk of damage due to extreme weather, such as heavy rain or hail and storm winds.
Since 2007, the Dutch Association of Insurers has been publishing the ‘Climate Damage Monitor’ to keep track of damage claims due to hail, storms or floods. It shows where in the Netherlands damage was caused by which weather conditions. Outliers were, in addition to the February storms of 2022, the floods in Limburg in 2021 (211 million euros), and the hailstorms in Southeast Brabant in June 2016 (667 million euros).
Richard Weurding, director of the Dutch Association of Insurers, cannot say which part of the total number of claims is due to extreme weather. But it is certainly “substantial”, and more importantly: the share is growing. “If you also look at international research, you see that it is an increasing trend.”
Climate change
This increase is due to climate change, says Rob Sluijter of the KNMI. While the storms of February 2022 were not due to global warming, the increase in other weather risks was. Droughts last longer, when it does rain, it rains harder. Extreme hailstorms can also occur more often.
Sluijter is working on improved warning systems for such extreme weather conditions. These must help citizens, companies and governments to prevent damage caused by extreme weather as much as possible. Insurers also benefit from this. The Association therefore works together with the KNMI, for example by providing data on where the most damage is reported.
The systems, which have been in the works since 2020, are constantly being developed. “Now we issue a storm warning up to 48 hours in advance. But we sometimes see a storm coming a week in advance, so we warn earlier.” Once a storm is imminent, the KNMI can indicate with increasing precision where it will blow the hardest. Specific areas, such as a village, can be warned of heavy showers an hour in advance.
We sometimes see a storm a week in advance. We’re going to warn sooner
That warning will also look different more often. Not only: ‘The wind is going to blow hard’, but also: ‘Trees could fall over’. Sluijter: “If you make the concrete consequences clear, people are more inclined to act.” The Dutch Association of Insurers wants to encourage exactly that effect: that people prepare better for bad weather. Director Weurding thinks that advice such as ‘stay at home’ or ‘take the car away from trees’ can save ‘tens of millions’ per year.
Much weather damage can be prevented by proper preparation, the Association believes. This can be about small things, such as parking cars out of reach of potentially falling trees. But it can also be about bigger choices, such as where to build houses. Weurding: “There is a housing shortage, but you also have to think about the long term. So don’t build houses that may not be insurable in the long term because they are located in the floodplains. I don’t want to scare you, but we all have to work on that.”
Read also: Director of the Dutch Association of Insurers: ‘We really need to see where we can still build in the Netherlands’
Not drought, but floods are
Insurers do not cover all damage caused by extreme weather. For example, damage to improperly maintained objects is not reimbursed. Drought damage, such as pile rot, is usually also overlooked. “Drought is more nuanced, because that is also partly due to artificial water management. That cannot be guaranteed, because it is not a sudden disaster from outside.” Drought does fall under some loose regulations for farmers.
In recent years people have become better insured against flooding, unless the flood comes from the sea or a large river. In 2021, the Meuse flooded within a few centimeters, says Weurding. Now the Association would like to work with the government on a financial solution. The Association would also like to see a single claims desk where people can report. “We saw that there was a need for this in Limburg.”
Weurding cannot simply say whether the increasing climate costs will force insurers to increase their premiums. “That is what individual insurers are about. They are prepared for this, have reserves and take volatility into account.” This volatility is partly absorbed by reinsurers. These are international insurers that cover the risks of the insurers themselves. “If they have to deal with very bad weather in other countries, reinsurance premiums go up. We will notice that.”
A version of this article also appeared in the May 11, 2023 newspaper.