Aon expecting $10bn economic hit from recent European floods

The catastrophic floods seen recently across parts of Western and Central Europe are expected to drive preliminary economic losses of over $10 billion, according to a new Aon report.

Flooding in Germany, photo from Roberto Pfeil – AFP

Torrential rainfall caused by a slow-moving area of low pressure “Bernd” resulted in catastrophic flooding across parts of Western and Central Europe from July 12-18.

This prompted the major overflow of several small and large tributaries flowing into the northern and southern branches of the Rhine River.

Thousands of properties were inundated. Beyond Germany and Belgium, widespread flood- and storm-related damage was also noted in Switzerland, France, Luxembourg, United Kingdom, Austria, the Netherlands, Italy, Poland, Hungary, Slovakia, and the Czech Republic.

The German Insurance Association (GDV) noted an insured loss estimate of €4 billion to €5 billion ($4.7 to $5.9 billion) in Germany alone.

Considering this, It’s safe to assume the economic loss in Germany alone will reach over €10 billion, with the wider figure even higher than that.

AM Best is of the belief that Germany’s non-life segment has the ability to absorb such high weather-related losses, as it has shown the discipline in the past to price appropriately for such events.

The devastating floods are expected to drive insurance and reinsurance industry losses of between €4 billion and €5 billion.

Elsewhere, Aon highlights a historic 24-hour period of rainfall that prompted catastrophic flash flooding across China’s Henan Province on July 20.

According to Henan’s provincial meteorological center, the average rainfall around the Zhengzhou metro region for was 457.5 millimeters (18.01 inches) alone.

Heavy rains elsewhere in the province led to several dam failures and major damage to property, agriculture, and infrastructure.