Catastrophe risk modeller RMS estimates that insurance and reinsurance industry losses from the July flooding in Western and Central Europe will likely range between €5 billion (USD 6 billion) and €6.5 billion (USD 7.7 billion).
The devastating flooding occurred between July 12th and 18th, 2021, impacting parts of Western and Central Europe, including Belgium, France, Luxembourg, the Netherlands, Italy, Austria, and Switzerland, although Germany remains the worst affected region.
According to RMS, re/insured losses in Germany are estimated to be between €3.5 billion (USD 4.1 billion) and €4.5 billion (USD 5.3 billion), which accounts for the majority of the overall loss.
Last week, the German Insurance Association (GDV) said that it expects insured losses in Germany to be at the top of its up to €5.5 billion (USD 6.5 billion) range.
RMS reconstructed a flood hazard footprint that covers the worst affected regions, including western and southern Germany, eastern Belgium, eastern France, and Luxembourg. The risk modeller estimates that total insured losses for these areas will be in the range of €5 billion to €6.5 billion.
The catastrophe risk modeller expects losses in Germany to account for some 70% of the total loss, followed by Belgium with roughly 25% of the loss.
RMS’ estimate includes insured property and business interruption losses to residential, commercial, industrial, automobile, and infrastructure lines and accounts for the potential of post-event loss amplification and extended business interruption.
However, the estimate from RMS does not include losses in the Netherlands, which sits outside of the model domain, or losses in Switzerland, Bavaria and Saxony in Germany, and Austria, which were caused outside the time window of the heaviest rainfall.
Daniel Bernet, product manager, Europe Flood Models, RMS, commented: “In terms of loss, this event is expected to be comparable to the costliest European flood events in recent history, the Central and Eastern Europe floods of 2002 and 2013.
“However, unlike the 2002 and 2013 events during which overtopping and breaching of major rivers contributed substantially to overall damages, the 2021 event occurred in a different region and was characterized with much steeper and faster flood waves with higher flow velocities in smaller rivers and tributaries that caused substantial structural damage, and regretfully, an unusually high number of fatalities.”