PARIS—The French insurance industry is expected to suffer “significant” losses as a result of Windstorm Xynthia, Moody’s Investors Services said Wednesday, adding that the costs of the storm will be considerably less for the reinsurance industry.

Xynthia, which struck western Europe in February, caused damage to several countries, but France took the brunt of the storm. Moody’s analysts said that while Xynthia was less violent than other storms that have hit the country since 1999, damages from the storm likely will be in the range of €500 million ($681.1 million) to €1 billion ($1.36 billion) in France.

“The combination of winds and high tides has also been responsible for devastating floods on the French Atlantic coast, and the costs of these floods are potentially high, due to serious damage to property but also sizeable business interruption claims,” said Benjamin Serra, a Paris-based Moody’s analyst and author the report, “Storm Xynthia: Significant Impact for French Insurers, Much Less So for Reinsurers,” in a statement.

The French Federation of Insurance Cos. reported that total insured losses from Xynthia in France may be higher than €1.2 billion ($1.63 billion), but that estimate may be revised higher due to the amount of flooding. Moody’s expects the net cost of Xynthia to be slightly lower or comparable to 2009’s Windstorm Klaus, which caused about €1.68 billion ($2.29 billion) of insured losses in France.

Moody’s estimates that costs for the reinsurance industry will be low, as the floods from Xynthia were declared natural disasters by the French government and will be covered by state-owned Caisse Centrale de Reassurance S.A.

“Firstly, 50% of the claims related to floods will be picked up by CCR,” said Mr. Serra in a statement. “Secondly, the combination of wind-induced claims and the floods-induced claims not borne by CCR may not significantly exceed primary insurers’ retention.”

Mr. Serra noted that as a result of the event, reinsurers may be more exposed to future climatic events in France.

Primary insurers exposed to losses from Xynthia include Paris-based Groupama S.A., which has 15% to 20% of the French insured market share, and Munich-based Allianz S.E., which has at least a 12% market share in France, according to Moody’s.