According to the German Insurance Association (GDV), insurers in the country have been working under pressure for the last few weeks to provide quick relief to flood victims, with the number of reported claims having risen to around 190,000.
Around a month after the flood disaster in Germany, insurers have already made advances in the high three-digit million range, this is expected to increase to the higher end of its updated re/insurance industry loss estimate of between €4.5 billion to €5.5 billion.
Jörg Asmussen, GDV’s general manager, commented: “The companies have so far paid out advances of around 700 million euros to their customers.
“Of this, a good 500 million euros are attributable to damage in the private sector such as residential buildings, household items and vehicles, and almost 200 million euros to commercial risks.”
The figures come from the updated damage estimate for the low pressure area “Bernd”, which swept across large parts of Germany from July 13th to 18th.
Due to heavy rain and floods, the storm front caused severe damage, especially in Rhineland-Palatinate and North Rhine-Westphalia, but also in Bavaria and Saxony.
“Total damage tends to move around the upper end of the estimate. We are now expecting that the amount of damage will be around the upper end of our estimate,” he explained.
“It remains important that the people in the affected areas are helped quickly. That is why the recording of claims and quick initial payments have priority at the moment. It doesn’t take long to search for invoices and receipts, instead there are lump-sum advance payments from the insurer,” he continued.
The amount of the advance depends on the needs of those affected and is determined on the basis of the damage profile or the damage description.
For example, costs for initial measures or other costs, such as hotel accommodation, are estimated. Asmussen continued: “The advances are therefore usually well into five digits for larger claims.”
In addition, numerous insurers have set up aid funds for those affected and often also offer psychological help in addition to material.
In total, the GDV expects around 190,000 claims for both the private and commercial sectors, split 160,000 private and 30,000 commercial.
According to the GDV, North Rhine-Westphalia was affected with around 135,000 claims, including 21,000 commercial risks. There, advances of almost €400 million were made, including a good €100 million for commercial risks.
Around 33,000 reports of damage was counted in Rhineland-Palatinate, 4,000 of which were commercial risks which resulted in payouts of €275 million, of which almost €70 million were for commercial risks. These figures are a clear sign that the majority of the serious loss events may have occurred in Rhineland-Palatinate, says the GDV.
The remaining approximately 20,000 claims occurred in the rest of Germany, mainly in the states of Bavaria and Saxony.
“The high amount of advance payments made promptly in this large number of cases shows the efficiency of private insurance companies in such disasters,” said Asmussen.
He explained that the flood highlighted the importance of protecting against natural hazards, such as heavy rain and flooding.
Against this background, it remains an important concern of the insurance companies to significantly increase the spread of natural hazard insurance from less than 50% nationwide.
He added: “It is also important to reach those who, despite the recent flood disaster, do not want to believe that they too could be affected by natural hazards.”
