At the beginning of the 1990s, there were still no precise analyses of natural hazard risks for the public insurers – also because the information technology required for the spatial analysis of natural hazards was still barely available at the time.

The devastating series of winter storms in 1990 made everyone involved fully aware of the considerable threat potential facing the public insurers. For them, the risks were existential.

Firefighters in Düsseldorf are clearing a fallen tree blocking a road. Winter storm WIEBKE, which swept across Germany as part of a series of storms in the late winter of 1990, caused extensive damage throughout the country.

Establishment of the NatCat Centre

From the mid-1990s onwards, Deutsche Rück built up a NatCat Centre, staffed by natural scientists specialising in meteorology (storm risk), geology (earthquake risk) and hydrology (flood risk).

Unlike international reinsurers, Deutsche Rück focused on developing loss scenarios with the greatest possible regional granularity.

The NatCat Centre used an early geographic information system (GIS) to analyse regional portfolio and claims data, as well as geoscientific data. This provided the primary insurers with the necessary data for premium calculation, product design, and loss prevention.

Pioneer in the Market

At that time, natural hazard modelling emerged as a key area of focus. To this end, Deutsche Rück drew on its newly established geoscientific expertise and the data pool of its clients, which, unlike any other insurers, possessed extensive claims experience in this field.

This map of surface level pressure, taken at 1 am CET on 26 December 1999, shows winter storm LOTHAR shortly after it intensified over the North Atlantic, en route to Central Europe.

As a pioneer in the market, Deutsche Rück developed natural hazard models tailored to the regional characteristics of the public insurers. Since then, these models have enabled the primary insurers to pursue a risk strategy in the field of natural hazards that is appropriate to their individual circumstances.

Using scenario analyses, the experts at the NatCat Centre demonstrate, for example, how the loss situation would have developed if the devastating winter storm LOTHAR of 1999 had swept across other regions of Germany.

The winter storm LOTHAR set a new record in 1999: In just one day, it caused more insured losses than any other single loss event previously recorded in Western Europe. In Germany and France, the losses amounted to the equivalent of around EUR 6 billion. The worst affected were Baden-Württemberg and parts of Bavaria.