Central Europe flooding industry loss between US $2.2bn and US$3.4bn: Verisk

Insurance industry losses from the recent severe flooding that struck central Europe in September are estimated to range between EUR 2 billion (~US $2.2 billion) to EUR 3 billion (~US $3.4 billion), according to Verisk Extreme Event Solutions.

The company said that this severe flood event, like a similar June flood event in Europe that primarily impacted Germany, was caused by what is known as a Vb (“five-b”) weather system, which it notes is a relatively unusual setup that can lead to significant extended periods of rainfall and flooding.

The loss impacts were largely caused by flooding in Czechia, Poland and Austria, Verisk said, but the worst was seen along the border of Poland and Czechia.

In addition, parts of Germany, Hungary, Romania, Slovakia and Italy also experienced mild to moderate flooding impacts from the same weather event.

Verisk’s initial insurance industry loss estimate compares closely to a €2 billion to €3 billion range indicated by reinsurance broker Gallagher Re.

While S&P Global Ratings had said that it anticipates the insurance market loss from these floods to be around €2.2 billion across Czechia, Poland, Austria, and Romania.

S&P had also said that it it expects a significant share of the insurance claims from the European flooding will be covered by reinsurance capital.

Also for comparison, insurance and reinsurance broker Aon’s Impact Forecasting unit gave an industry loss estimate for the Central Europe Flooding in September 2024, caused by Storm Boris, of €1.65 billion.

While our sister publication Reinsurance News had also reported that with Generali’s European flood per event reinsurance coverage kicking in after a €300 million attachment, the insurer is said likely to make a reinsurance recovery on Storm Boris by analysts at Goldman Sachs.

Verisk also said that the proportion of the economic impact of this event paid by the insurance industry is expected to vary by country, with flood insurance uptake relatively high in Austria and Czechia, although lower limits on flood, especially in Austria, may offset this somewhat in the eventual insured loss tally. At the same time, Poland typically sees most of the commercial risk covered, but only a small fraction of homes and autos carry flood coverage, Verisk explained.

Verisk said that its estimate of insurance market losses from the Central European flooding include insured physical damage to property (residential, commercial, industrial, auto, agriculture), both structures and their contents, from both on- and off-floodplain flooding, as well as additional living expenses (ALE) for residential claims and business interruption (BI) for commercial claims.

They do not include losses in Germany or other countries not listed in the initial group, or non-modelled losses, losses to infrastructure, losses from extra-contractual obligations, uninsured losses, effects of demand surge, or losses from hazardous waste cleanup, vandalism, or civil commotion, whether directly or indirectly caused by the event.