MediumVII Reinsurance & Specialty Risk2 November 2026, Monday
Storms Austen and Boelo put the reinsurance hours clause to the test
On 2 November Aon estimated the economic and insured losses from Storms Austen and Boelo, which hit Western Europe on 22–25 October, in the hundreds of millions of euros. France bears the largest share. Whether the two storms count as one event or two will determine how much insurers retain themselves.
The storms opened the season early. According to Aon's Impact Forecasting unit, the strongest gust in Britain was 179 km/h, recorded at Padstow in Cornwall. In France, around 300,000 homes lost power at the peak and at least four people died. Energy Networks Association data cited by Insurance Business show 838,700 properties in Britain suffered power cuts across the two storms. Aon gave no separate figure for insured losses alone.
The real question lies in the contracts. Catastrophe reinsurance uses an hours clause that treats losses within a set period as a single event; for windstorm, that period is usually 72 hours. Austen struck on 22–23 October and Boelo on 23–25 October. If treated as one event, an insurer pays its retention once; if two, it pays twice. For comparison, Storms Dudley, Eunice and Franklin in February 2022 led to around 177,000 claims and £497 million in payouts, according to ABI data.
Talay assessment
Bottom line
Losses in the hundreds of millions of euros are too small to reach the lower layers of European catastrophe programmes. The real impact falls on retentions: two events means insurers pay out of their own pocket twice. European catastrophe pricing is expected to fall on 1 January; these two storms will not change that trend, but they will make it harder for insurers to negotiate lower retentions.
Likely effects
- Insurer retentionsNegativeWeeks
If the storms count as separate events, primary insurers pay their retention twice, and the loss sits on insurers' balance sheets rather than with reinsurers.
- January renewalUncertainWeeks
Provided the losses stay below the lower layers of programmes, the downward trend in European catastrophe pricing holds.
- Retention negotiationsUncertain1–6 months
Back-to-back storms could raise insurers' demand for lower retentions and aggregate cover.
Possibilities, ranked
- 1Losses stay in the lower layers65%
Insured losses remain in the hundreds of millions of euros, reinsurance programmes are largely untouched and January pricing falls.
Watch: First insured loss estimates from PERILS and Aon
- 2An hours clause dispute emerges25%
Insurers and reinsurers disagree on whether the two storms form a single event, delaying recoveries.
Watch: Event counts in French and British insurers' loss disclosures
- 3Losses exceed expectations10%
French losses grow and reach the reinsurance layer of some local programmes.
Watch: The French insurance federation's loss estimate
Probabilities are calibrated judgement based on the sources, not measurement, and are revised as new information arrives. Not investment advice.
Market reaction
Indicators affected
- Properties without power (UK)▼ 838,700
- Strongest gust▼ 179 km/h