Windstorms cause more forest damage in Europe than any other natural hazard. AXA Climate has developed and validated a climate-sensitive insurance framework for windthrow risk — now tested across Germany, France, Ireland, Scotland, and Denmark — that delivers credible pricing and fast payouts for forest owners.
Why Are So Few European Forests Insured Against Windstorms?
Only 1–5% of Germany’s forest area is currently insured against windstorm damage. The protection gap is not unique to Germany: across Central and Northern Europe, most forest owners remain financially exposed despite rising climate risks. The reasons are well documented — low risk awareness, lack of tailored products, and a mismatch between how risk is perceived and how it is actually distributed across the landscape.
Windstorms account for approximately 50% of all reported forest disturbance damage in Europe between 1950 and 2019 (Patacca et al., 2020). As climate change intensifies the frequency and severity of extreme wind events, this protection gap will only widen — unless insurance products become better calibrated to actual forest risk.
How Can Windthrow Risk Be Measured for Forests?
Through the EU-funded Piloting Innovative Insurance Solutions for Adaptation (PIISA) project, AXA Climate led a pilot to build and test an innovative windthrow insurance solution, co-developed with forest owners and commercial insurance partners.
The core innovation is the development of a Wind Power Exposure Index (WPEI), which integrates wind intensity, wind direction, and storm duration into a single index. This, along with a forest vulnerability map that integrates forest characteristics such as species composition and stand structure, can be used for the estimation of expected storm damages at a forest-stand level, and support insurance product development and pricing.
The index draws on open-source ERA-5 Land reanalysis data (Copernicus), processed across more than 27,000 historical data points to calibrate return periods and inform underwriting decisions. The vulnerability component goes beyond wind speed alone. Forest stands are categorized using machine-learning clustering techniques applied to characteristics such as canopy height, tree density, species composition, slope, and topography. This allows the model to distinguish between high, medium, and low vulnerability stands.
What is the Added Value for Forest Owners and Insurers?
The vulnerability framework was initially developed and tested in consultation with value chain actors including AXA Germany and forest owner Arco Zinneberg in Bavaria, Germany. The process then continued with the development of the WPEI framework, which was tested in Ireland with data from Storm Eowyn (January 2025). It was also validated with varying levels of sensitivity analysis in Scotland, Denmark, and France.
Key outputs from the pricing simulations showcase an indicative premium of approximately 5€ per hectare per year for an insured value of 1,000€ per hectare, which is broadly aligned with the observed willingness-to-pay levels for forest insurance in Europe.
The parametric structure provides a key advantage over traditional indemnity products: faster payouts, with no need for on-the-ground loss assessment. This matters for forest owners facing urgent post-storm clearing and replanting decisions, where access to liquidity within days- not months- can determine long-term stand recovery.
While parametric structures may not fit for all forest types or risk exposure, the combined modeling framework – integrating hazard characteristics, stand-level vulnerability, and actuarial simulations – provides a credible foundation for climate-sensitive forestry insurance for windstorms.
The framework developed under PIISA demonstrates that wind risk for forests can be quantified, priced, and insured in a scalable way. The WPEI modeling architecture uses globally available ERA-5 Land data, making it deployable across Europe without structural redesign, though regional calibration remains essential to tailor the index to different biogeographic regions and calibrate it with local back-testing against historical events.
How to Accelerate Forest Insurance Protection and Close the Gap?
European forests are a crucial climate asset, they store carbon, regulate water regulation role and provisioning services – but Forests are increasingly exposed to climate pressure with compound effects of pest and diseases. Closing the forest insurance protection gap is a climate resilience imperative.
The pilot demonstrates that crossing climate sciences, data modelling and forest knowledge can bring impactful innovation and promote sustainable practices: the modeling showed that thoughtful forest management can reduce vulnerability against windstorms, thereby reducing risk and improving insurance affordability.
AXA Climate proudly contributes to accelerate forest market development and share knowledge with open-source results available on PIISA website here.
What is needed now is deployment of novel insurance products made possible at EU level, through partnerships to pool the assets together, at the levels of forest cooperatives, national forestry associations, and institutional forest owners active across multiple countries.
This article was written by the Nature team at AXA Climate (Rhea Kochar, Quentin Voituron, Ariane Kaploun), in the context of the PIISA project (Piloting Innovative Insurance Solutions for Adaptation), a Horizon Europe initiative (Grant Agreement n°101112841). AXA Climate specializes in climate risk modeling and parametric insurance design for windstorms, wildfires, floods, and other nature-related risks. We work with forest owners, public authorities, reinsurers, and development finance institutions to bridge the climate adaptation gap through financially sustainable insurance solutions. If you are working on windthrow risk in a storm-prone region and want to explore whether this framework applies to your context, reach out to our team.
