Germany flooding to drive around €2bn insurance market loss: GDV
Recent flooding in areas of Bavaria and Baden-Württemberg in Germany are expected to drive insurance market losses in the region of €2 billion (US $2.15bn), according to the German Insurance Association (GDV).
“We expect insured damage in the region of around two billion euros,” explained GDV Managing Director Jörg Asmussen.
“Because the floods in particular have not yet expired on the Danube, this estimate still attaches a certain amount of uncertainty,” he continued.
Once the flooding subsides, the Association said it will follow-up with member companies to further assess the insured losses caused.
In its latest Impact Forecasting update, insurance and reinsurance broker Aon explained the recent flood situation.
“Catastrophic flooding due to extreme rainfall struck southern Germany, particularly the federal states of Baden-Württemberg and Bavaria, between May 31 and June 4. Widespread floods left several people dead, prompted evacuations of thousands of people, and resulted in notable property and agricultural damage, which was initially estimated to reach at least hundreds of millions of EUR, potentially higher. Additional human and material losses were associated with scattered thunderstorm activity that generated heavy rainfall, flash flooding, and large hail that resulted in localized significant impacts across the continent,” the broker said.
Adding, “From the insurers’ point of view, it is still too early to make a valid estimate of the flood-related damage in southern Germany as companies are still collecting claims. According to the German Insurance Association (GDV), 47 percent of buildings are insured against all natural hazards in Bavaria, whereas in Baden-Württemberg the figure stands at 94 percent, regarding the historical compulsory insurance scheme. Apart from the significant structural and infrastructural damages, it is obvious that notable agricultural losses have been incurred as well. ”
Aon said that, because of the extent of the floods, “economic and insured losses are likely to reach at least into the hundreds of millions EUR, possibly higher.”
Germany has been affected by flooding a number of times in recent months, with December river flooding in northern and central Germany causing insured damage estimated at €250 million ($270 million).
The GDV has also forecast that further flooding in May in Saarland and Rhineland-Palatinate would be similarly devastating.
Germany was badly impacted by flooding in 2021 that drove significant market losses.
The Cresta organisation said that those July 2021 floods caused an insurance and reinsurance market loss estimated at around $13.8 billion.
